May 01, 2018
PRECIOUS-Gold dips as dollar holds firm ahead of U.S. Fed meet
(Reuters) - Gold prices fell for a second straight session on Tuesday as the dollar firmed near 3-1/2-month highs, with investors awaiting direction on U.S. monetary policy from the U.S. Federal Reserve.
Spot gold fell 0.2 percent to $1,312.11 per ounce at 0356 GMT. Prices hit $1,310.11 on Monday, their lowest since March 21.
U.S. gold futures for June delivery eased 0.5 percent to $1,313.10 per ounce.
"The recent U.S. dollar revival has negatively impact gold as the intensity of the USD correction has caught most traders by surprise," said Stephen Innes, APAC trading head at OANDA.
The dollar index was steady at 91.848 as investors awaited the Fed's policy decision and key employment data due this week for fresh clues on the strength of the U.S. economy.
While the U.S. central bank is widely expected to stand pat on policy, market participants will be closely watching the two-day meet concluding on Wednesday for hints of an interest rate hike in June.
The greenback touched its highest since Jan. 11 at 91.986 on Friday. It climbed 2 percent in April, recording its biggest monthly gain since November 2016.
"Investor are also remaining cautious ahead of this week's two day FOMC meeting," said analysts at ANZ in a note.
Higher interest rates tend to boost the U.S. dollar and push bond yields up, pressuring gold prices by increasing the opportunity cost of holding non-yielding bullion.
Meanwhile, U.S. stock futures pared small losses, while Asian shares were little changed on Tuesday after the U.S.extended the deadline for imposing steel and aluminium tariffs on imports from major allies.
Most markets in Asia are closed for a Labour Day holiday.
Among other precious metals spot silver fell 0.1 percent to $16.29 per ounce. Prices touched their lowest in about a month, at $16.18, in the previous session.