Gold prices fell on Monday and continues to remain below the $2,000 per ounce mark as the Federal Reserve is scheduled to announce its decision on interest rates this week.
What Happened: Spot gold was trading at $1,988.80 per ounce during Monday afternoon Asian trade, down 0.48%. The yellow metal is still far from the 2020 highs of close to 2,075 per ounce level while it faces the $2,000 per ounce mark as a stiff resistance. This stands in contrast to the bullish outlook given by many experts in recent times.
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For instance, Peter Schiff, chief economist and global strategist at Euro Pacific Capital, had said in late March that investors may be running out of time to buy gold below the $2,000 per ounce price.
“Time is running out to buy #gold for less than $2K per ounce. Once gold breaks above $2.1K it's off to the races. Don't get left behind. The choice between fighting #inflation and mitigating a financial crisis was always inevitable, as was the Fed's choice,” Schiff had said in his tweet.
The SPDR Gold Trust (NYSE:GLD) closed 0.03% higher on Friday while the iShares Gold Trust (NYSE:IAU) gained 0.05%.
Rate Path: Market participants are maintaining a cautious stance ahead of the Federal Open Market Committee meet this week with investors and traders expecting a 25 bps hike by the central bank.
Ilya Spivak, head of global macro at Tastylive, told Reuters that if the Federal Reserve comes out unexpectedly hawkish, it won’t bode well for the yellow metal. "However, I don’t think prices will fall below the $1,930 level," Spivak said.
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