Gold sees monthly gains despite Tuesday’s plunge

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KUWAIT CITY, May 1: Gold prices, on track for their third consecutive monthly gain, experienced a slight decline on Tuesday amidst a strengthening dollar ahead of the Federal Reserve’s monetary policy meeting. Spot gold fell by 0.6 percent to $2,320.54 per ounce, while US gold futures dropped 1.1 percent to $2,331.10. The rise in the dollar index by 0.3 percent made gold, priced in US currency, less attractive to holders of other currencies, reports Al- Jarida daily. Kyle Rodda, a financial markets analyst at Capital. com, noted that gold prices are returning to basic levels as the dollar and bond yields increase following a decrease in geopolitical risks. There are concerns of a possible decline in gold prices if the Federal Reserve adopts a hawkish tone in its monetary policy.

Despite Tuesday’s dip, gold has gained nearly 4 percent this month, supported by strong purchases from central banks and a shift towards safe-haven assets amid geopolitical tensions. Investors are eagerly awaiting the outcome of the Federal Reserve’s meeting, scheduled to conclude on Wednesday, as well as the release of nonfarm payrolls data on Friday. It is expected that the Federal Reserve will maintain the benchmark interest rate unchanged between 5.25 and 5.5 percent at this meeting. Traders, according to the Fed Watch tool affiliated with CME, anticipate one interest rate cut later this year, possibly in November, due to indications of persistent infl ation and firm rhetoric from Federal Reserve officials, including Chairman Jerome Powell. In other precious metals, silver decreased by 1.5 percent to $26.72 per ounce in spot transactions, while platinum saw a 0.4 percent decline to $943.52. Despite these drops, both metals are poised for monthly gains. Palladium also experienced a 1 percent decrease, closing at $964.25 per ounce.

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