2022.05.0310:26:00UTC+00Gold Dips As Fed Meeting Gets Underway

Gold prices were moving in a tight range on Tuesday as a two-day policy meeting of the Federal Reserve meeting gets underway.

Spot gold slid 0.2 percent to $1,859.34 per ounce, while U.S. gold futures were down 0.2 percent at $1,860.08.

The dollar hovered near 20-year highs and bond yields edged higher amid expectations the U.S. Federal Reserve will hike interest rates by a half-a-percentage point when it hands down its policy decision on Wednesday - the first such increase in about 20 years.

There is potential for the U.S. central bank to adopt an even more hawkish tone than many expect. As inflation worries mount, some investors are watching for the possibility of a 75 basis point hike, or a faster pace of balance sheet reduction.

Elsewhere, the Bank of England is expected to raise interest rates to their highest level since 2009 on Thursday.

Earlier today, Australia's central bank raised its key interest rate for the first time in over 11 years and signaled more tightening measures, saying that now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic.