Gold price firms with spotlight on central bank meetings

Meanwhile, the US dollar eased 0.1% against its rivals, making gold less expensive for other currency holders.

“Gold is expected to be in a range-bound trade before the Fed decision. But there is optimism here that the Fed is almost done with rate hikes and that will support the market,” Edward Moya, senior market analyst at OANDA, said in a Reuters note.

The focus now is on a series of central bank meetings this week, starting from the Fed policy decision on Wednesday, followed by the European Central Bank on Thursday and the Bank of Japan a day later.

Markets anticipate 25 basis-point rate hikes from both the Fed and the ECB, but investors will await clues on the outlook from policymakers, especially from Fed Chair Jerome Powell.

“The market will be looking out for Powell’s speech tomorrow and if it seems like they’re more likely leaning towards one more rate hike, then that would be bad news for gold,” Moya added.

China’s top leaders pledged on Monday to step up policy support for the economy, focusing on boosting domestic demand.

“The remarks out of Beijing to work on more stimulus for the economy will be positive for retail demand for gold by Chinese consumers,” Peter Fertig, an analyst at Quantitative Commodity Research said in a note.

Last week, investment firm Haywood Securities maintained their bullish stance on gold despite the market being affected by protracted volatility in economic data during the second quarter.

For this year and the next, Haywood analysts are projecting gold prices of $2,025 and $2,200 per ounce respectively, which are above the average market forecasts of $1,924 and $1,913 per ounce.