Gold futures settled lower on Monday as the dollar climbed up amid bets about a rate hike ahead of the Federal Reserve’s policy announcement.
The Federal Reserve is scheduled to announce its monetary policy on Wednesday. The central bank is widely expected to raise rates by 25 basis points. As per the CME FedWatch tool, probability for a 25 basis points hike now stands at 84.3 percent, versus 83.9 percent a day earlier and 90.5 percent a week earlier.
In addition to the Federal Reserve, the European Central Bank, the Bank of England as well as the Reserve Bank of Australia are undertaking a review of interest rates in the next few days.
The dollar index surged to 102.19, gaining more than 0.5%.
Gold futures for June ended lower by $6.90 or about 0.4% at $1,992.20 an ounce, the lowest close in more than a week.
Silver futures for July edged up $0.004 to settle at $25.230 an ounce, while Copper futures for July settled at $3.9340 per pound, gaining $0.0435.
In economic news today, a report released by the Institute for Supply Management today showed manufacturing activity in the U.S. contracted for the sixth consecutive month in April, although the pace of contraction slowed by more than expected.
The ISM said its manufacturing PMI rose to 47.1 in April from 46.3 in March, with a reading below 50 indicating a contraction. Economists had expected the index to inch up to 46.6.
The Commerce Department also released a report showing an unexpected increase in U.S construction spending in the month of March.
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