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Spot gold declined by 0.2% to $2,153.59 per ounce as the U.S. dollar strengthened, with traders anticipating the U.S. Federal Reserve's monetary policy decision.
Expectations for the Fed to maintain steady rates led to anticipation regarding the economic and interest rate projections for the remainder of the year.
Analyst noted a fading professional momentum ahead of the Federal Open Market Committee (FOMC), prompting a correction in gold prices after last week's surge.
Despite hitting a record high of $2,194.99 on March 8, gold has dipped by 2%, influenced by U.S. consumer prices index data which tempered hopes for immediate rate cuts.
Traders are pricing in a 55% chance of a rate cut in June, as indicated by the CME FedWatch Tool, anticipating potential support for precious metals prices if an interest rate-cutting cycle begins.
The strengthening dollar ahead of the Fed's decision increased the cost of gold for holders of other currencies, while geopolitical tensions and central bank purchases, particularly by China, continue to bolster gold's fundamental support.
Despite this, the physical gold market remains subdued, with quiet activity observed in regional physical markets following recent rallies.
Spot silver eased by 0.3% to $24.84, platinum edged up 0.1% to $895.75, and palladium lost 1% to $980.97.
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