Investing.com – Gold prices rebounded from session lows but remained under pressure as the dollar and U.S. bond yields advanced on expectations that the Federal Reserve was set to hike rates for the first time this year.
for April delivery on the Comex division of the New York Mercantile Exchange fell by $7.10, or 0.43%, to $1,310.80 a troy ounce. Gold prices had plunged to a low of $1,306.80 before clawing back some of their losses.
Gold came under pressure as rose, supporting an advance in the , lessening demand for the yellow metal as the Federal Reserve Open Market Committee (FOMC) meeting got underway, a day ahead of a .
Gold is sensitive to moves higher in the U.S. dollar – a stronger dollar makes gold more expensive for holders of foreign currency, thus, reduces investor demand for the precious metal.
FOMC members are expected to vote to raise the Federal Reserve’s benchmark rate by 0.25% to range of 1.50% to 1.75%. Current investor expectations are for three 0.25% rate hikes total 2018, which would leave the Fed’s benchmark rate at range of 2.00% to 2.25% by year-end.
That could change on Wednesday, however, with the release of the FOMC’s Summary of Economy Projections which will include the closely watched “dot plots,” showing where each FOMC member in the meeting thinks that interest rates are heading at the end of the year for the next few years and in the longer run.
“Along with a 25 basis point hike, the Fed should sound more upbeat at the March FOMC, with a better balance of risks,” said TD Securities. “The 2018 median dot should stay at 3 hikes for 2018, which may be dovish as markets anticipate the Fed moving to 4. We expect the 2019 dot to rise, but the longer-run dot to stay at 2.75%.”
In other precious metal trade, fell 0.80% to $169.20 a troy ounce, while fell 1.05% to $944.80 an ounce.
fell 1.27% to $3.08, while rose 0.45% to $2.67.
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