Gold sees boost as dollar softens

NEW YORK (April 25) As markets await clues from the Federal Reserve, gold prices remain rangebound. 

Gold prices remain in a sideways range as markets await clues from the Federal Reserve. The dollar fell 0.2% in the late New York session, supporting gold as investors bet on a Fed pause or even a rate cut later this year.

Gold continues to trade within a narrow range of $1,970 to $2,011.

Rising interest rates typically push up the opportunity cost of holding non-yielding assets like bullion, but the Fed’s pivot is expected to be driven by worsening economic conditions, which increase the safe-haven appeal of gold.

Spot gold XAU/USD rose 0.3% to $1,995.57 an ounce, and gold futures rose 0.3% to $2,006.35 an ounce by 02:00 GMT. The Fed is still expected to hike rates by another 25 basis points when it meets next week, but markets are pricing in a 60% chance of a mid-year pause in rate hikes and growing bets of a rate cut later this year.

A Bloomberg survey also pointed to increasing bets that the Fed will cut interest rates, especially if economic conditions worsen. However, the central bank has given no indication that it intends to taper its hawkish stance in the coming months.

Focus is now largely on signals from the Fed next week on where monetary policy will go in the remainder of the year. A slew of Fed officials had warned in recent weeks that interest rates would likely rise further to quell sticky inflation – a trend that boosted the dollar and weighed on metal markets.

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