Gold Prices Drift Lower as Investors Focus on US Fed Meet

A 100g gold bar from the Credit Suisse is seen in a shop in Zurich, Switzerland March 20, 2023. REUTERS/Denis Balibouse
A 100g gold bar from the Credit Suisse is seen in a shop in Zurich, Switzerland March 20, 2023. REUTERS/Denis Balibouse
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Gold Prices Drift Lower as Investors Focus on US Fed Meet

A 100g gold bar from the Credit Suisse is seen in a shop in Zurich, Switzerland March 20, 2023. REUTERS/Denis Balibouse
A 100g gold bar from the Credit Suisse is seen in a shop in Zurich, Switzerland March 20, 2023. REUTERS/Denis Balibouse

Gold prices edged lower on Tuesday, ahead of the Federal Reserve policy meeting as expectations grew that the US central bank would slow its monetary policy tightening given the upheaval in the banking sector.

Spot gold was down 0.2% at $1,975.71 per ounce, as of 0722 GMT. US gold futures eased 0.1% to $1,980.10, Reuters reported.

According to the CME FedWatch tool, markets are pricing in a 25.5% chance that the Fed will stand pat at the end of its March 21-22 meeting, with a 74.5% chance of a 25-basis-point (bps) hike.

"A pause (in rate hikes) could send gold back above $2,000 initially, but for it to hold onto those gains, we'd need to see a lower dot plot and dovish press conference … they're more likely to hike by 25 bps and peddle a 'data dependent' angle," said Matt Simpson, a senior market analyst at City Index.

Gold is considered a safe haven during times of financial uncertainty, and lower interest rates make non-yielding bullion more attractive by reducing the opportunity cost of holding it.

In volatile trading on Monday, gold prices initially fell by 1%, but reversed course to jump to their highest since March 2022 at $2,009.59, as investors digested the impact of measures taken by several central banks to contain a banking crisis and stabilize global financial markets.

UBS agreed to buy rival Credit Suisse on Sunday for $3.23 billion in a shotgun merger engineered by Swiss authorities, which stemmed from selling in bank shares though the mood was fragile.

"Despite banking regulators rushing to shore up market confidence, the uncertain macro backdrop continues to entice buying (in gold)," analysts at ANZ said in a note.

The dollar rose 0.2%, making bullion expensive for overseas buyers. Spot silver fell 0.3% to $22.45 per ounce, platinum lost 0.5% at $983.20 and palladium was 0.2% lower at $1,411.15.



World Bank Announces $700 Mln in Financing for Egypt

The moon is seen after the day of Strawberry Moon over old houses in Cairo, Egypt, June 22, 2024. REUTERS/Amr Abdallah Dalsh
The moon is seen after the day of Strawberry Moon over old houses in Cairo, Egypt, June 22, 2024. REUTERS/Amr Abdallah Dalsh
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World Bank Announces $700 Mln in Financing for Egypt

The moon is seen after the day of Strawberry Moon over old houses in Cairo, Egypt, June 22, 2024. REUTERS/Amr Abdallah Dalsh
The moon is seen after the day of Strawberry Moon over old houses in Cairo, Egypt, June 22, 2024. REUTERS/Amr Abdallah Dalsh

The World Bank announced on Monday $700 million of budget support for Egypt, part of a 3-year, $6 billion program that the bank pledged earlier this year.

The $700 million is designed to help Egypt boost private sector participation, macroeconomic and fiscal resilience, and a greener growth trajectory, the World Bank said in a statement.