Fed statement due at 1800 GMT on Wednesday
Gold could experience technical pullback towards 1,955 analyst

March 21 Reuters Gold continued to decline for the second day on Tuesday after rising above 2,000 an ounce in the last session, as investors turned their attention from the banking crisis to the U.S. Federal Reserve39;s interest rate decision.

Spot gold was down 0.6 at 1,966.30 per ounce, as of 1149 GMT, while U.S. gold futures slipped 0.6 to 1,971.10.

The metal had hit 2,009.59 an ounce on Monday, its highest since March 2022 but soon started to retreat.

Bullion has gained over 100 after the collapse of U.S.based Silicon Valley Bank earlier this month, as investors scrambled for the safe haven.

European shares rose nearly 1, with banking stocks leading the recovery, following a raft of measures to stabilise the sector, while investors hoped for less aggressive moves by the Fed.

There is some caution in the market ahead of the Fed rate decision, said Michael Hewson, chief market analyst at CMC Markets.

According to the CME FedWatch tool, markets are pricing in a 16.6 chance that the Fed will stand pat at the end of its March 2122 meeting, with a 83.4 chance of a 25 basis points bps hike.

If the Fed manages to dampen rate cut expectations, gold is likely to fall, otherwise another rise towards the 2,000 mark is on the cards, Commerzbank analysts wrote.

Lower interest rates make nonyielding bullion more attractive by reducing the opportunity cost of holding…

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