Gold prices tread water as Fed meeting looms

Gold prices moved little in Asian trade on Monday, seeing little relief from recent losses as traders continued to price in higher-for-longer U.S. interest rates before a Federal Reserve meeting later this week. The yellow metal tumbled from record highs hit earlier in April as safe-haven demand waned in the absence of any escalation between Iran and Israel.

Growing signs of sticky U.S. inflation saw traders largely price out expectations for early rate cuts by the Fed. The central bank is now only expected to begin trimming rates in September, or even the fourth quarter.

Higher-for-longer rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal. But while gold prices sank in recent sessions, they were still trading positive for the year, amid persistent fears that high interest rates will weigh heavily on global economic growth.

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