The yellow gold metal eased slightly at the opening of trading earlier in the week, weighed down by strengthening U.S. bond yields and the U.S. dollar amid investor confidence for an interest rate hike ahead of the FOMC policy meeting this week.
Towards the end of the Asian session, spot gold traded hovering around $ 1,975 per ounce, while gold futures were down at $ 1,979 per ounce.
10 -year U.S. bond yields strengthened at a nearly one -month high, showcasing an increase above the 2%level. This was followed by the US dollar trading higher against its main rivals.
Investors are increasingly optimistic that the Federal Reserve (Fed) will begin its tightening cycle by raising interest rates on Wednesday. This is a negative factor for gold.
In addition to the FOMC meeting, the Central Bank of England (BOE) and Japan (BOJ) will also hold meetings this week. The BOE is expected to raise interest rates by 25 basis points while the BOJ will remain with the current monetary policy.
Meanwhile, the Ukraine-Russia crisis plaguing the market was seen easing after the two countries said there was progress in their talks over the weekend.
This slightly eased risk made investors relinquish their hold on the gold safe-haven.
