Dollar up 0.2
Fed likely to raise rate by 25 bps on Wednesday
JPM buys substantial majority of First Republic Bank39;s assets

May 1 Reuters Gold prices eased on Monday as the U.S. dollar held firm, with cautious traders awaiting the Federal Reserve39;s interest rate hike decision later this week.

Spot gold fell 0.5 to 1,980.78 per ounce by 0759 GMT. U.S. gold futures shed 0.5 to 1,989.20.

The dollar index rose 0.2, making greenbackpriced bullion more expensive for overseas buyers.

The Federal Open Market Committee FOMC will meet on May 23, and investors are largely expecting a 25 basispoint interest rate hike.

If the Fed comes out unexpectedly hawkish, then it won39;t bode well for gold. However, I don39;t think prices will fall below the 1,930 level, said Ilya Spivak, head of global macro at Tastylive.

Data on Friday highlighted that U.S. consumer spending was unchanged in March, while underlying inflation pressures remained strong, which could see the U.S. central bank raising interest rates.

Bullion is known as an inflation hedge, but rising rates tend to dull the zeroyielding asset39;s appeal.

Gold prices rose more than 1 in April as renewed concerns over turmoil in the U.S. banking sector enhanced its safehaven appeal for investors.

If we see a meaningful downturn in U.S. economic data that expanded rate cut expectations for the back half of this year, then gold prices could climb above the 2,000 mark, Spivak added.

Meanwhile JPMorgan Chase Co. said…