Gold steady as traders await US Federal Reserve meeting

GOLD prices held steady on Tuesday (May 2) as market participants awaited fresh cues from top central banks on their monetary policy plans, especially from the US Federal Reserve.

Spot gold was unchanged at US$1,982.58 per ounce by 0012 GMT. US gold futures fell 0.1 per cent to US$1,990.80.

The Federal Reserve, which meets on May 2-3, is widely expected to raise interest rates by 25 basis points.

While gold is known as an inflation hedge, rising rates tend to lower demand for zero-yielding asset.

Bullion prices slipped in the previous session as the dollar rose after better-than-expected US manufacturing data.

The Institute for Supply Management (ISM) said on Monday that its manufacturing PMI rose to 47.1 last month from 46.3 in March, which was the lowest reading since May 2020.

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Gold heads for second monthly rise on US banking turmoil

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The European Central Bank (ECB) is widely expected to raise rates for the seventh straight meeting on Thursday.

Regulators seized First Republic Bank and sold its assets to JPMorgan Chase & Co on Monday, in a deal to resolve the largest US bank failure since the 2008 financial crisis and draw a line under a lingering banking turmoil.

Spot silver was flat at US$24.97 per ounce, platinum rose 0.2 per cent to US$1,051.33 and palladium edged 0.2 per cent higher to US$1,454.06. REUTERS