Gold ticks lower, traders assess Fed rate trajectory

Gold prices ticked down in light trade on Monday (19 June), pressured by a stronger dollar, as investors assessed the path ahead for interest rates following hawkish remarks from US Federal Reserve policymakers.

Spot gold XAU= fell 0.1% to $1,955.79 per ounce by 0433 GMT. US gold futures GCcv1 were down 0.2% to $1,967.20.

The dollar index edged up, making bullion less attractive for buyers holding other currencies. USD/

Fed officials struck a hawkish tone in their first comments since the central bank held the policy interest rate steady at its meeting last week.

"Gold has spent the majority of June between $1,935-$1,970, and with no obvious catalyst on the horizon, traders prefer to trade the ranges and not fully commit to a breakout," said Matt Simpson, senior market analyst at City Index.

US stock markets will be closed on Monday for the Juneteenth holiday.

Bullion posted a small weekly fall last week as traders ramped up bets for a July rate hike following the Fed's hawkish pause after 10-straight hikes.

Although gold is considered a hedge against inflation, interest rate hikes raise the opportunity cost of holding non-yielding bullion.

Traders are now pricing in an about 72% chance of a Fed rate hike in July, according to the CME Fedwatch tool.

"Near term, the risk of another one or two more Fed rate hikes can dim the appeal of gold, but to put in perspective, the Fed is closer to the end of the tightening cycle," said OCBC FX strategist Christopher Wong.

Investors now await Fed Chair Jerome Powell's congressional testimonies on Wednesday and Thursday for further cues on future rates.

Spot silver XAG= fell 0.2% to $24.09 per ounce, platinum XPT= was down 0.4% to $977.77 while palladium XPD= edged 0.1% lower to $1,409.43.