Gold under pressure as dollar gains ground

Gold prices fell on Wednesday on track for the second day in a row, about to trade below the psychological barrier of $2300, as the dollar gained ground against major rivals. 

Recent remarks by Fed officials hurt the odds of early interest rate cuts in July, with markets now looking for more remarks by Fed officials to gauge the path forward. 

Prices 

Gold prices fell 0.45% today to $2303 an ounce, with a session-high at $2321, after losing 0.45% on Tuesday away from a week high at $2332. 

The Dollar

The dollar index rose 0.2% on Wednesday on track for the second profit in a row against a basket of major rivals, heaping pressure on gold prices. 

Minneapolis Fed President Neil Kashkari said on Tuesday that it remains too early to say that inflation has been definitively stopped. 

New York Fed President John Williams also said the Fed is bound to cut interest rates at an unspecified rate, but refused to put a clear timetable for it.

US Rates  

Following such remarks, the odds of a Fed interest rate cut in June fell to 9%, while the odds of a July cut fell to 29%, and the odds of a September cut fell to 65%. 

According to the Fedwatch tool, investors expect two interest rate cuts overall this year, likely in September and November. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 1.72 tonnes yesterday to a total of 830.47 tonnes.