Gold Gains Ground but Remains Below $1,700 as Fed Uncertainty Grows

On Monday, gold prices recovered slightly from recent losses, but remained below key levels as investors anticipated fresh Federal Reserve policy tightening measures.

Spot gold jumped 0.2% to $1,678.51 per ounce by 20:03 ET, while gold futures climbed 0.2% to $1,680.40 per ounce (00:03 GMT).

Bullion prices plummeted to 2-and-a-half-year lows last week as red-hot U.S. inflation data indicated that the Fed is likely to increase interest rates by a large margin this week and for the remainder of the year.

The revelation pushed the dollar to levels not seen in nearly two decades and boosted U.S. Treasury yields, driving capital to flee gold. As the Federal Reserve began to boost interest rates this year, prices for the yellow metal plummeted from its 2022 peaks.

Gold now has an uphill battle to surpass $1,700, a key support level that it violated for the second time this year last week. Before this week's Fed announcement, the gold price is expected to remain relatively constant.

At the conclusion of a two-day meeting, it was widely predicted that the Federal Reserve would raise interest rates by 75 basis points, with some traders pricing in a 100 basis point hike. It is projected that the U.S. benchmark interest rate would end the year at over 4 percent, its highest level since the financial crisis of 2008.

Copper futures climbed 0.4% to $3.5547 per pound, reversing the severe falls of the previous week.

This year, the price of the red metal has been severely lowered by fears of a global fall in industrial activity, increasing inflation, and rising interest rates. China's economic downturn has also had a significant impact on copper prices.

As a result of a strike at Escondida, the world's largest copper mine, the red metal's price may be sustained by a shrinking supply.