Investing.com – Gold prices traded sharply lower amid dollar strength as focused shifted to the Federal Reserve’s monetary policy decision next week while easing fears of a global trade war lessened safe-haven demand.
for April delivery on the Comex division of the New York Mercantile Exchange fell by $8.90, or 0.67%, to $1,316 a troy ounce.
Gold prices suffered their biggest one-day drop in nearly week as investors fret the Federal Reserve – at its meeting March 21 – could adopt a slightly more hawkish outlook on future monetary policy.
Morgan Stanley (NYSE:) said the FOMC’s rate projections will show a “pronounced upward drift,” though the median dot will stay at three hikes this year.
The bank also said there is a risk of a fourth rate being added to the Fed’s rate-hike projection should Powell adopt a “hawkish tilt,” persuading three or more FOMC members to favor tighter monetary policy measures sooner rather than later.
Investor expect the Federal Reserve to hikes rates next week with a further two rate hikes forecast for this year.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Also weighing on gold was a drop in safe-haven demand as trade war fears eased after the director of the White House National Trade Council, Peter Navarro played down the prospect of a global trade war.
In other precious metal trade, fell 0.92% to $16.39 a troy ounce, while lost 0.79% to $955.30 an ounce.
fell 0.70% to $3.13, while fell 1.94% to $2.69.
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Source: Investing.com
