Gold Prices Set for Monthly Drop as Dollar Extends Gains

Investing.com – Gold prices moved off session lows but remained on track to post a monthly drop as an ongoing rally in the dollar kept a lid on demand for the precious metal.

for June delivery on the Comex division of the New York Mercantile Exchange fell by $6.10 or 0.47%, to $1,317.60 a troy ounce. The precious metal fell to an intraday low of $1,317.50.

The remained below 3% despite data showing inflation was nearing the Federal Reserve’s target, raising the prospect of a faster pace of monetary policy tightening.

The Federal Reserve’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, in the 12 months through March, nearly matching the Fed’s 2% target.

The uptick in inflation comes a day before the Federal Reserve Open Market Committee (FOMC) is slated to begin its two-day policy meeting on Tuesday.

According to investing.com’s , 94% of traders expect the Fed to on Wednesday. The prospect of a fourth rate hike in December, however, was just under 50% following a dramatic rise in recent weeks.

Sentiment on gold prices has soured in recent weeks as traders trimmed their bullish bets on the yellow metal to a six-week low amid a lack of supportive factors as geopolitical uncertainty continued to ease.

The leaders of North and South Korea on Friday pledged to bring a formal end to the Korean War and work towards denuclearisation of the Korean Peninsula.

showed money managers reduced their net long positions in gold futures to 136,600 lots from 166,300 lots for the week ended April 24.

In other precious metal trade, fell 0.68% to $16.30 a troy ounce, while fell 1.12% to $906.10 an ounce.

fell rose 0.02% to $3.071.

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