- Gold sees support at $1,950 and $1,933 – Analyst
- Almost even bets on rate hike and Fed-CME pause Fedwatch
April 4 (Reuters) – Gold fell into a tight range on Tuesday after recovering in the previous session as traders ducked for the Federal Reserve’s next move after an OPEC-led oil surge clouded inflation prospects .
Spot gold was down 0.1% to $1,982.79 an ounce by 0946 GMT, while US gold futures were steady at $2,000.
Bullion fell on Monday after a surprise cut in OPEC+ crude production but rallied as the dollar tumbled after the release of weak US economic data.
Gold is viewed as a hedge against inflation, but higher interest rates to stem rising price pressures increase the opportunity cost of holding gold. On Tuesday, gold was sandwiched between support from a weaker dollar and headwinds from higher yields.
“Policy’s near-term course will also depend on upcoming US economic data such as payroll numbers. Any indication of a slowdown in hiring activity could provide support for gold prices again,” said UBS analyst Giovanni Staunovo.
Gold prices in sterling and euros were both near session lows, weighed down by the pound rising to a fresh 10-month high against the dollar and the euro hitting its highest level in two months.
Non-interest bearing gold suffered as bond yields were higher in both the US and Eurozone as investor focus returned to inflation and central bank rate hikes, with March having six rate hikes in eight central bank meetings.
Markets now see a 58% chance of the Fed raising rates by a quarter basis point in May, with a 42% chance of a pause, while investors see another 60 basis points of rate hikes from the ECB.
“Multiple support levels have now been established between $1,950 and $1,933,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a statement.
Silver was up 0.2% to $24.05 an ounce, platinum was up 0.9% to $994.14, while palladium was up 1% to $1,474.20.
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Reporting by Seher Dareen and Kavya Guduru in Bengaluru; Edited by Shailesh Kuber
Our standards: The Thomson Reuters Trust Principles.
Seer Dareen
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