By Rahul Paswan
(Reuters) – Gold prices fell on Tuesday following gains in the previous session, as traders remained focused on the prospects for interest rate cuts from the U.S. Federal Reserve.
Spot gold fell 0.3% to $2,315.68 per ounce by 1:52 p.m. ET (1752 GMT). U.S. gold futures settled 0.3% lower at $2,324.2 per ounce.
“What we’re seeing today in both gold and silver is routine price corrections after Monday’s gains, which was not unexpected,” said Jim Wyckoff, senior market analyst with Kitco.
Based on the CME’s FedWatch Tool, traders in the federal funds futures market believe there is a roughly two-thirds chance the U.S. central bank will cut rates in September.
The potentially stalled progress on inflation means monetary policy may not be as tight as Fed officials think it is, Minneapolis Federal Reserve president Neel Kashkari wrote in an essay that raises the possibility price pressures are “settling” to a level above the Fed’s 2% target.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
China’s central bank continued its gold accumulation for the 18th month in a row, data showed, adding 60,000 troy ounces to its reserves despite high prices.
Elsewhere, spot silver fell 0.5% to $27.30 per ounce. Platinum rose 2.7% to $980.25 and palladium dropped 0.7% at $971.00.
(Reporting by Rahul Paswan in Bengaluru; Editing by Krishna Chandra Eluri and Ravi Prakash Kumar)
