Gold prices took a downward turn in Asian trading on Monday, shedding a significant support level as investors turned cautious on non-yielding assets ahead of the Federal Reserve meeting later in the week.

Meanwhile, the surge in industrial metals, particularly copper, seemed to hit a temporary pause after reaching 11-month highs last week. This slowdown came as copper prices retreated slightly due to profit-taking spurred by middling Chinese economic data.

The decline in precious metals was accentuated, with the dollar stabilizing near two-week highs in anticipation of the Federal Reserve’s announcements. Additionally, 10-year Treasury yields remained above 4%, further impacting investor sentiment.

Spot gold declined by 0.4% to $2,148.19 per ounce, while gold futures expiring in April slipped by 0.5% to $2,151.05 per ounce by 00:20 ET (04:20 GMT).

Investors are eagerly awaiting the conclusion of the two-day Federal Reserve meeting scheduled for Wednesday. While no change in interest rates is anticipated, any indications of potential rate cuts will be closely monitored, especially given the recent inflation data for February, which surpassed expectations.

This shift in sentiment has led to a retreat in gold prices from their earlier highs in March, with a drop below the crucial $2,150 support level signaling the possibility of further declines in the short term.

ANZ analysts suggest that gold prices could potentially decline to $2,100 per ounce in the near future. However, they have revised their end-2024 price target for gold to $2,300 per ounce, citing potential interest rate cuts and deteriorating economic conditions as factors likely to support demand for the precious metal this year.

In addition to gold, other precious metals also experienced a downturn on Monday. Platinum futures fell by 0.7% to $935.50 per ounce, while silver futures slid by 0.7% to $25.198 per ounce.

As for copper, three-month futures on the London Metal Exchange and one-month U.S. copper futures both retreated by 0.3%. Despite the pullback, they remained near 11-month highs reached last week, driven by reports of production cuts by China’s largest copper smelters. However, concerns over weak economic growth in China, the world’s largest copper importer, following mixed economic data, have cast doubt on the sustainability of copper’s rally.

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