©Reuters.
Investing.com– Gold prices fell slightly in Asian trade on Tuesday but remained above key support levels as markets remained broadly averse to precious metals ahead of this week’s key Federal Reserve meeting.
Among industrial metals, copper prices fell slightly but remained within sight of 11-month highs after a stellar rally over the past three sessions.
Bullion prices have recovered some lost ground this week, retaking the $2,150 an ounce support level on Monday as uncertainty over the Fed’s stance persisted. But the yellow metal also remained well below record highs reached at the beginning of March.
fell 0.1% to $2,158.26 an ounce, while April expiry fell 0.1% to $2,161.35 an ounce at 01:30 ET (0530 GMT).
Strong dollar ahead of Fed meeting puts pressure on gold
Dollar strength had a key bearing on gold prices, as anticipation of the Fed meeting and dovish signals from the Bank of Japan kept traders largely biased towards the greenback.
It rose to a two-week high on Tuesday, after posting strong gains in the past two sessions.
The Fed is expected to take a step forward at the conclusion of its two-day meeting on Wednesday. But markets fear any potentially aggressive signals from the central bank, particularly a scaling back of interest rate cut forecasts, following hotter-than-expected inflation data over the past two months.
Higher rates for a longer period bode poorly for gold and other precious metals, as high rates increase the opportunity cost of investing in the sector.
fell 0.7% to $913.15 an ounce, while it fell 0.3% to $25.192 an ounce.
Copper prices are falling, but remain near recent peaks
on the London Metal Exchange it fell 0.5% to $9,046.0 a ton, while it fell 0.6% to $4.1052 a pound.
But the two instruments remained within sight of 11-month highs reached on Monday, as the prospect of a shortfall in Chinese supplies of refined copper triggered a sharp collapse in copper prices.
Copper’s rally was further supported by stronger-than-expected data from China, which is the world’s largest copper importer.