Gold prices remained stuck in a narrow range during trading on Wednesday, as traders prepared for the interest rate decision by the US Federal Reserve and comments from Federal Reserve Chairman Jerome Powell later in the day, which may shed more light on the chances of interest rate cuts this year.

Market focus will be on the Federal Open Market Committee's monetary policy statement due at 21:00 Riyadh time and Powell's press conference at 21:30 Riyadh time.

With the US central bank expected to keep interest rates steady at the end of today's meeting, traders are awaiting its economic forecast and interest rate expectations for the rest of the year.

Goldman Sachs (NYSE:GS) analysts expect the US Federal Reserve to cut interest rates only three times this year, by 25 basis points each, compared to its previous estimate of four cuts in 2024.

“There is a real possibility that the Fed may not be as dovish as traders would like, and that the dot plot could be revised from three cuts to just two, or even one, rate cut by the Fed this year,” said Matt Simpson, chief analyst at City Index.

“This could send gold prices into a tailspin and see it fall below $2,050 if Powell disappoints on a rate cut,” Simpson explained.

Last week's US consumer price and producer price figures beat expectations, dampening hopes for early and aggressive US interest rate cuts.

Traders currently see about a 61% chance of a rate cut in June, according to the US interest rate tracker available on the Investing Saudi Arabia website.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

The dollar steadied after hitting a more than two-week high in the previous session. A stronger dollar makes gold more expensive for holders of other currencies, reducing demand for the yellow metal.

Meanwhile, spot gold is leaning towards breaking the downtrend line per ounce and rising to the $2,175-$2,182 range, according to Reuters technical analyst Wang Tao.

Gold at settlement yesterday

Gold futures prices fell at the settlement of trading yesterday, Tuesday, in light of the rise of the US currency.

At settlement, gold futures for April delivery fell 0.2%, or $4.6, to $2,159.7 an ounce, after touching $2,150.2 during the session.

Gold and dollar now

Gold futures are now up 0.09% at $2,161 an ounce.

While spot gold contracts rose by about 0.05% to $2,159 per ounce.

On the other hand, the dollar index rose by 0.03% to 103.525 points.

Other minerals

Spot silver fell 0.1 percent to $24.88 an ounce, platinum fell 0.5 percent to $889.85 and palladium fell 0.3 percent to $988.24.