Gold holds near 3-week low as Fed rate hike views lift dollar

Reuters/Zandi Shabalala/05-03-17

Gold hovered near three-week lows on Wednesday as the dollar firmed on expectations of a U.S. interest rate increase in June and the market discounted a surprise win by France’s far-right presidential candidate.

The U.S. Federal Reserve is expected to hold interest rates steady after concluding its two-day meeting on Wednesday, but it might focus on future rate hikes, which would reduce demand for non-interest bearing gold.

…”The focus for gold today is definitely on the Fed and markets are now speculating that next hike will take place at the June FOMC meeting,” said Quantitative Commodity Research analyst Peter Fertig.

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