(Bloomberg) -- Gold slid — narrowing what is set to be a third straight monthly gain — as investor focus turned to this week's US Federal Reserve meeting at which policymakers are expected to strike a hawkish tone on interest rates.
Bullion edged down to trade below $2,300 an ounce ahead of the Federal Open Market Committee decision on Wednesday. Traders are bracing for the possibility that central bankers may be forced to backtrack from previous hints of swifter rate cuts. For the month, gold still is up almost 3%.
Swaps traders are now pricing for the Fed to deliver at most two cuts by the end of the year — the fewest number of expected reductions since November 2023. Higher rates are typically negative for gold as bullion doesn't pay interest.
Despite the timeline for Fed cuts being pushed back, the precious metal has climbed roughly 12% this year amid robust demand from Asian markets — especially China — and elevated geopolitical tensions in Ukraine and the Middle East. Gold demand from central banks posted its strongest start to any year on record during the first quarter, the World Gold Council said Tuesday.
Spot gold fell 1.6% to $2,298.18 an ounce by 10:46 a.m. in New York. The Bloomberg Dollar Spot Index was up 0.3%. Silver, palladium and platinum all declined, with platinum and palladium briefly reaching parity.
--With assistance from Yvonne Yue Li.
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