Gold prices slip slightly as focus shifts to US Fed meeting

21 Mar 2023 , 08:30 AM

Tuesday saw a little decline in gold prices as investors anticipated the Federal Reserve policy meeting in light of growing speculation that it would decide to hold off on raising interest rates due to the turmoil among banks.

Spot gold was down 0.1% at $1,977.69 per ounce. Similarly, U.S. gold futures decreased 0.1% to $1,981.30.

In tumultuous trading on Monday, gold prices surged to their highest level since March 2022 at $2,009.59 before falling down as investors assessed the effects of steps taken by several central banks to limit a banking crisis and stabilize the world’s financial markets.

In a shotgun merger facilitated by Swiss authorities, Swiss lender UBS agreed to purchase competitor Credit Suisse on Sunday for $3.23 billion and to take on up to $5.4 billion in losses.

By the conclusion of their carefully watched policy meeting on March 21–22, markets are pricing in a 53% likelihood that American officials will maintain their benchmark lending rate in the current 4.50%–4.75% range.

Policymaker for the European Central Bank Robert Holzmann on Monday softened his prior call for three further interest rate increases of 50 basis points to occur quickly.

Low-interest rates tend to be advantageous for gold since they lower the opportunity cost of storing the non-yielding metal.

The dollar increased by 0.1%, which decreased the appeal of bullion for buyers using other currencies.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings increased by 0.38% to 924.55 tonnes on Monday from 921.08 tonnes on Friday. 

Spot silver prices decreased by 0.1% to $22.49 per ounce, platinum prices remained unchanged at $988.33, and palladium prices remained unchanged at $1,413.97.

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