On Tuesday, gold prices declined as it remains careful ahead of the Federal Reserve’s decision for a rate hike this week.
Gold futures for June delivery decreased by -0.18% to $1,988.70 per troy ounce on May 02’s Asian afternoon session. On Monday, spot gold was traded at $1,977.90 per ounce, which is 0.60% down.
Meanwhile, in April, spot gold hit $1,989.62 an ounce, equating to a 1.07% rise. It came after a significant leap of 7.76% in the prior month.
The US dollar index increased by 0.24%, weighing on the yellow metal’s prices. As a result, it becomes more expensive for buyers outside America.
Based on experts, prices are likely to decrease below $1,930.00 since gold is considered as a hedge against inflation.
Moreover, market participants are watching the upcoming Fed meeting this week. Traders are expecting a 25-bps rate hike. Furthermore, a negative fed tone in the meeting will guide the markets’ next move. Therefore, it could limit the excessive rise in the commodity’s prices.
Besides, if the Fed would not hint that it might not stop, yields would have an ongoing rise. In addition, this could pressure precious metals and prevent them from continuing their recent rally. On the other hand, if the Fed hit its pause button, gold could recover immediately.
Papua New Guinea Gold Mine Faces Protests
A controversial gold mine, which is moving towards reopening, brought activists from Papua New Guinea to join global protests. This occurred before the yearly general meeting of Canada-based Barrick Gold.
Barrick, the second-largest mining company in the world, would report mutual prosperity through partnerships. However, people residing near several of the company’s mines thought otherwise. They protested what they claim as tenacious destruction of the environment and violence against locals.
According to an expert, the major gold mine ignored demands that it was responsible for violence and water contamination. The damages were said to displace people and led to ongoing attacks, house burning, and even deaths.