Gold Prices Subdued as Traders Remain Wary of Further Fed Rate Hikes

Investing.com – Gold prices were roughly flat Monday as a Federal Reserve interest rate hike expected next week kept a lid on upside in the precious metal despite concerns of a U.S.-China trade war underpinning safe-haven demand.

for June delivery on the Comex division of the New York Mercantile Exchange fell by $1.30 or 0.10%, to $1,298.10 a troy ounce.

Gold prices traded in narrow range as traders weighed the prospect of further rate hikes against the return of safe-haven demand as U.S.-China trade talks over the weekend yielded limited progress, raising the prospect of a trade war between the world’s largest two economies.

Also holding back the precious metal were expectations the Federal Reserve would hike rates for the second time this year, reducing demand for the yellow metal. While the rebound off session lows also kept a lid on an advance in gold.

Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding gold as it pays no interest.

The odds of faster pace of rate hikes, meanwhile, have regained momentum over the past week as investing.com’s showed the odds of a fourth rate hike at the Fed’s December meeting rose to 38.7% from 26.6% the previous week.

In other precious metal trade, rose 0.02% to $16.45 a troy ounce, while fell 0.62% to $901.10 an ounce.

rose 1.15% to $3.13.

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