Gold prices were little changed on Monday as the prospect of imminent interest rate rises kept them near the five-week lows touched last week, while elections in Europe created uncertainty and fueled investor buying.
Spot gold was down 0.01 percent at $1,204.30 an ounce by 3:08 p.m. EST (1908 GMT). That compares with $1,194.55 last Friday, its lowest level since Jan. 31. U.S. gold futures settled up 0.1 percent at $1,203.10.
Investors are focusing on Wednesday’s Dutch elections. The chance of a eurosceptic party coming to power in the Netherlands is seen as small but a strong election performance could fuel speculation of a surprise result in French presidential elections in April and May. Wednesday is also the second day of the U.S. Federal Reserve’s two-day meeting. The widely expected decision to raise rates could boost the U.S. currency, which when it rises makes dollar-priced commodities more expensive for non-U.S. firms. “A rate rise from the Fed is pretty much priced in, we’re probably going to see two more hikes this year,” said Oxford Economics analyst Daniel Smith. “A period of higher rates will tend to mean pressure on gold prices.”
The statement from the Fed, due to be released Wednesday at 2 p.m. (1800 GMT) followed by a briefing at 1830 GMT, will be scrutinized for any changes in thinking among policymakers.
“Now, the debate shifts to Fed dots,” said Wayne Gordon, analyst for UBS Wealth Management, retaining a long view and target price for gold at $1,300 per ounce.
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