2023.03.2018:12:00UTC+00Gold Futures Settle Higher As Dollar Remains Weak

Gold futures settled higher on Monday as the dollar lost ground against most of its major counterparts as investors assessed the possible interest rate move by the Federal Reserve.

The Fed is scheduled to hold its monetary policy meeting on Tuesday and Wednesday. The central bank is widely expected to raise interest rate by 25 basis points.

The dollar index dropped to 103.28, losing more than 0.4%.

Gold futures for April ended higher by $9.30 or about 0.5% at $1,982.80 an ounce. Gold futures rose to $2,014.90 an ounce in the Asian session.

Silver futures for May ended up $0.184 at $22.646 an ounce, while Copper futures for May settled at $3.9555 per pound, up $0.0590 from the previous close.

Gold prices climbed higher as risk aversion gripped financial markets despite global central banks announcing measures to provide dollar liquidity in a bit to stem fallout from panic in the banking sector.

"Gold traders are celebrating as persistent banking worries have some traders scrambling towards the precious metal," says Edward Moya, Senior Market Analyst at OANDA. "Long-term gold bulls are celebrating, probably sharing the Leonardo Di Caprio party celebration meme as Fed rate cut bets are now fully pricing in a rate cut at the June FOMC meeting."

Moya adds: "Gold might struggle to extend this rally until we get past the FOMC meeting, which might contain a surprise hike and continued voiced confidence that they have the tools to deal with all the current financial stability concerns."