The price of gold fell by 0.6%, which was caused by the strengthening of the US currency and a decrease in demand for safe haven assets due to the easing of geopolitical tensions in the Middle East.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.15% to 105.83.
Investors are also adjusting their positions ahead of the publication of important US data that may affect the prospects for the Fed's monetary policy - the GDP report for the 1st quarter will be released on Thursday, and the personal consumption expenditures price index, the Fed's preferred inflation indicator, will be presented on Friday. According to forecasts, GDP growth slowed to 2.5% QoQ from 3.4% QoQ in the 4th quarter, and the core PCE price index rose by 2.6% per annum in March after an increase of 2.8% per annum in February. Economists said that resilient U.S. economic data suggests any surprises are likely to be on the upside, potentially lifting the dollar and U.S. yields further, which in turn will put pressure on gold. Fed policymakers have said in recent weeks that they should not rush to lower interest rates, and they need to wait for additional evidence of a weakening economy before moving on to easing policy. According to the CME FedWatch Tool, markets see a 15.2% probability of a 25 basis point rate cut at the Fed meeting in June, and a 41.5% probability of a rate cut in July. Overall, markets believe that the US Federal Reserve will be one of the last major central banks to cut rates - markets currently estimate a 67.3% probability of the first rate cut by September.