[Click here for an interactive chart of gold prices]
Meanwhile, the dollar hovered close to a 20-year high amid global growth concerns and expectations of more hawkish tone from the Fed. Benchmark 10-year US Treasury yields also rose to multi-year peaks.
“There is pressure on gold market with the stronger dollar and yields amidst fears that the Fed might be more hawkish,” Phillip Streible, chief market strategist at Blue Line Futures in Chicago, told Reuters.
“China’s economic activity in their factory data hit lows which is also pulling down the metals’ market,” he added. China’s factory activity contracted in April as widespread covid-19 lockdowns halted industrial production and disrupted supply chains.
Investors are now keeping a close eye on the US central bank’s Federal Open Market Committee’s two-day meeting that is scheduled to begin Tuesday, following which policymakers are expected to deliver a series of aggressive rate hikes at least until the summer to fight surging inflation and high labour costs.
“Gold is having a pullback ahead of Fed but inflation is not transitory, and if inflation moves higher then gold and silver will move higher with it in the long-term,” Daniel Pavilonis, senior market strategist at RJO Futures, predicted.
(With files from Reuters)
