Gold falls 1.6% pending Fed decisions

Gold suffered heavy losses on Tuesday, with the precious metal closing near a two-week low following data on wholesale prices in the US and pending the Federal Reserve’s decisions on US interest rates.

The data showed that the structural index for wholesale prices increased by only 0.2% in February, losing the estimate of Wall Street analysts for an increase of 0.6%. This in combination with sharp decline in oil prices and today, it has boosted expectations that upward pressure on prices may have begun to de-escalate.

Meanwhile, the US Federal Reserve is expected to announce on Wednesday the first increase in interest rates since 2018 in order to face the inflation rally at the highest level in 40 years. The increase is expected to be limited to 25 basis points as the Fed is expected to tighten its policy with careful steps in order not to derail growth in the midst of the war in Ukraine.

Russia and Ukraine, meanwhile, resumed talks today to end hostilities, with the Ukrainian side leaving some room for optimism, citing “room for compromise.”

Against this background, the April delivery of gold lost $ 31.10, or 1.6%, and closed at $ 1,929.70 an ounce on the New York Mercantile Exchange.

Silver also closed with a negative sign, with the May contract losing 14 cents or almost 0.6% at $ 25,158 per ounce. Copper suffered small losses, with the May contract losing 0.2% to $ 4,513 a pound.

As for the rest of the metals, April platinum fell 4.7% to $ 1,002.50 per ounce, while palladium June closed with small losses of 0.2% to $ 2,412 per ounce.