FX.co ★ Gold Drops Ahead Of Fed Decision

Prices of the yellow metal declined further in Monday's trade amidst anxiety ahead of the Fed's decision due on Wednesday.

The Fed is widely expected to raise rates by 25 basis points. As per the CME FedWatch tool, probability for a 25 basis points hike now stands at 84.3 percent, versus 83.9 percent a day earlier and 90.5 percent a week earlier.

In addition to the Federal Reserve, the European Central Bank, the Bank of England as well as the Reserve Bank of Australia are undertaking a review of interest rates in the next few days. Bank of Japan had in its review last week continued the ultra-loose monetary policy strategy as well as retained the existing yield curve control policy.

The cautious mood is also in the backdrop of a slew of economic data releases on the horizon. Manufacturing PMI readings from the U.S. are due on Monday whereas services sector readings would be released on Wednesday. Non-farm payrolls and unemployment rate from the U.S. are due on Friday. Inflation readings are due in the following week.

The Dollar Index (DXY), a measure of the Dollar's relative strength against a basket of six currencies surged 0.18 percent overnight to 101.84. The day's range was between a low of 101.64 and a high of 101.96.

Gold Futures for June Settlement shed 0.07 percent to trade at $1,997.75. The day's trading range has been between $1,985.70 and $2,000.65.

Spot Gold has lost 0.06 percent to trade at $1,988.78 per troy ounce. The day's trading range has been between $1,977.19 and $1,991.96.