(MENAFN) On Wednesday, gold prices saw a slight decline attributed to the strengthening dollar, with the precious metal trading within a narrow range as investors awaited further insights into the Federal Reserve's monetary policy stance. In spot transactions, gold fell by 0.1 percent, settling at USD2,176.29 per ounce by 03.10 GMT. Similarly, gold futures in the United States also experienced a marginal decrease of 0.1 percent, reaching USD2,175.20 an ounce.
The uptick in the dollar index by 0.2 percent against a basket of major currencies contributed to the decline in gold prices, as it made purchasing gold more expensive for holders of other currencies. Despite this, gold prices have seen a notable ascent of over five percent since the beginning of the year, reaching record highs just last week. This surge has been fueled by various factors, including increased speculation on the Federal Reserve's inclination towards monetary easing, sustained demand for gold as a safe-haven asset, and heightened geopolitical tensions leading to central banks' increased purchases of bullion.
Analysts remain cautious about adopting an overly pessimistic outlook on gold prices amidst the prevailing geopolitical climate and the potential for further monetary easing. Matt Simpson, chief analyst at City Index, highlighted the challenge of constructing an extreme bearish case for gold prices given these circumstances.
Last week, the US Central Bank opted to maintain the interest rate within the range of 5.25 percent to 5.5 percent and reiterated its expectations of implementing three rate cuts by the year's end. As investors eagerly await more clarity on the Federal Reserve's policy direction, the gold market remains influenced by a complex interplay of factors, including currency fluctuations, economic indicators, and global geopolitical developments.
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