Gold prices rose in European trade on Tuesday, expanding the gains for the second straight day and hitting a record high at $3000 as haven demand increases while the US dollar declines.
The developments come ahead of the Federal Reserve’s policy meeting later today, widely expected to hold rates unchanged.
Prices
Gold prices rose 0.9% today to $3028 an ounce, a record high, with a session-low at $2999.
On Monday, gold rose 0.55%, the fourth profit in five days, hitting a record high at $3000.
The Dollar
The dollar index fell 0.2% on Tuesday on track for the third straight loss in a row, and about to plumb a five-month trough against main rivals.
A weaker dollar makes greenback-denominated gold futures more attractive to holders of other currencies.
Recent data showed US consumer confidence fell to 2-1/55 year lows, with a smaller than expected rise in retail sales in new signs of a potential economic slowdown.
The Fed
Later today, the Federal Reserve will convene to discuss policies, with markets expecting no changes in interest rates.
Data released last week showed US consumer prices slowed down more than expected in February, bolstering the case for a Fed rate cut in the first half of the year.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 1%, while the odds of a May rate cut stood at 30%.
The odds of a Fed June 0.25% interest rate cut stood at 75%.
SPDR
Gold holdings at the SPDR Gold Trust rose 0.86 tons on Monday, the fifth increase in a row to a total of 907.27 tons, the highest since February 25.
