Markets pricing in 25bp rate hike by Fed in May
Gold might retest support at 1,991 technicals
Britain39;s March CPI falls less than expected

April 19 Reuters Gold prices fell on Wednesday as the U.S. dollar regained some ground, while investors assessed the chances of the Federal Reserve raising interest rates just once more in May before pausing.

Spot gold was down 0.6 at 1,993.99 per ounce, as of 0654 GMT. U.S. gold futures slid 0.8 to 2,003.30.

The dollar index was up 0.2, making gold less affordable for buyers holding other currencies.

Expectations are already priced in for a 25 basispoint hike, leaving much of the focus on whether a rate pause will be signalled thereafter, said Yeap Jun Rong, a market analyst at IG.

While that may provide an anchor for gold prices, given the recent rally and overextended technical conditions, the possibility of some unwinding in prices upon validation of the Fed39;s rate outlook may still remain on the table.

The CME FedWatch tool shows an 86.6 chance of a 25 basispoint hike in May, with rate cuts expected in the back half of the year.

Higher interest rates dim nonyielding bullion39;s appeal.

The Fed should continue raising rates on the back of recent data showing inflation remains persistent, St. Louis Fed President James Bullard said on Tuesday.

But Atlanta Fed President Raphael Bostic said one more hike should be enough before taking a step back to see how our policy is flowing through the economy.

Investors are…