62 bets of rate hike from Fed in May CME Fedwatch
Gold sees support near 1,950 and 1,933 analyst

April 4 Reuters Gold eased into a tight range on Tuesday, after rallying in the previous session as traders hunkered down for the U.S. Federal Reserve39;s next move after an OPECled surge in oil prices clouded inflation outlook.

Spot gold fell 0.2 to 1,979.69 per ounce by 1131 GMT, while U.S. gold futures were also down equally to 1,996.40.

Bullion dropped on Monday after a surprise cut in OPEC crude production, but rebounded as the dollar stumbled following the release of weak U.S. economic data.

While the added inflationary worry of higher oil prices could force major central banks to assert their aggressive inflationfighting stances, and markets might expect more rate hikes, this could lead to gold unwinding some of its recent gains, said Han Tan, chief market analyst at Exinity.

Weighing on nonyielding gold, both U.S. and eurozone bond yields were higher as investor focus returned to inflation and central bank rate hikes, with March seeing six hikes across eight central bank meetings.

Gold is seen as a hedge against inflation, but higher interest rates to rein in rising price pressures increase the opportunity cost of holding it. On Tuesday, gold was wedged between support from a weaker dollar and headwinds from higher yields.

Markets now see a 62 chance of the Fed hiking rates by a quarter basis point in May, with a 38 chance of a pause, while investors see…