Gold prices declined in European trade for the first session in three under pressure from the stronger dollar against major rivals, but the precious metal remains bound in a tight range of trading.

Now traders await more data on the future of the Fed's policy tightening cycle and the potential for more rate hikes. 

Gold Prices Today

Gold prices fell 0.4% to $1,955 an ounce, with a session-high at $1,966, after rising 0.1% on Tuesday, the second profit in a row amid strong haven demand. 

The Dollar

The dollar index rose 0.1% on Wednesday for another session, almost hitting 11-week highs at 104.69 against a basket of major rivals.

Markets are betting the Fed will maintain high interest rates for a longer duration of time. 

The Fed

Recent US data, which showed slower growth in the services sector and higher unemployment, gives the Fed room to cease policy tightening at the June meeting, while opening the door for a resumption in rate hikes at the July meeting. 

US Rates

Markets are pricing in a 20% chance of a 0.25% rate hike by the Federal Reserve in June. 

However, the likelihood for a 0.25% Fed rate hike in July surges to 65%, compared to 35% odds of no change. 

The SPDR 

Gold holdings at the SPDR Gold Trust fell 1.45 tones yesterday to a total of 938.11 tones. 

Sterling fell in European trade for the fourth straight session against dollar, amid a grim outlook for the UK economy in the second quarter of the year.

The dollar is maintaining its gains near 11-week highs amid strong bets on high US interest rates for an extended duration. 

GBP/USD fell 0.1% to 1.2409, with a session-high at 1.2438, after closing down 0.1% yesterday, the third loss in a row. 

UK Economy

Some global banks are expecting the UK economy to slow down sharply in the second half of the year, led by the housing sector, which might force Bank of England to cut interest rates early. 

JPMorgan's analysts are pointing to the deteriorating markets of the UK housing sectors with the background of high and stubborn inflation.

Mortgage approvals continue to decline, an indication that current financial conditions are weighing on consumers. 

JPMorgan forex strategists are now selling the UK pound, noting it's only a matter of time before an extended duration of decline due to weaker growth. 

Dollar

The dollar index rose 0.1% on Wednesday for a second session on track to hit an eleven-week high at 104.69 against a basket of major rivals. 

Markets are betting the Federal Reserve will maintain interest rates higher for a longer period of time, in turn underpinning the greenback. 

Gold prices rose on Tuesday even as the dollar muscled up against major rivals, but the precious metal was still boosted by changing yields on US treasury yields. 

US two-year treasury yields rose by 7.5 points to 4.533%, while 10-year treasury yields rose 2.6 basis points to 3.714%, as 30-year treasury yields stabilized at 3.895%. 

There's no impactful US data released today, while Fed officials embark on their silent period ahead of the policy meeting. 

However markets are putting a 75.9% chance of no change in US monetary policies at the Fed's June meeting. 

‏However investors are looking forward for official clues on the path ahead for policies and interest rate moves in July.

Allianz chieft economist Muhammad Al-Aryan said that while concerns about a US debt default have subsided, markets now are looking forward to the Fed's efforts to contain inflation.

Despite risks surrounding high interest rates in the last 15 months, the tech sector was particularly brilliant amid the AI industry boom.

Otherwise, the dollar index rose 0.2% as of 19:03 GMT to 104.2, with a session-high at 104.3, and a low at 103.8.

On trading, gold spot prices rose 0.3%, or $6.30 as of 19:04 GMT to $1,980.5 an ounce. 

US stock indices rose mildly on Tuesday amid pressures on the US banking sector while investors following the yields on US treasury bonds.

Several banks registered losses after reports that regulators are considering a tightening of capital requirements in major banks. 

Allianz chieft economist Muhammad Al-Aryan said that while concerns about a US debt default have subsided, markets now are looking forward to the Fed's efforts to contain inflation.

Despite risks surrounding high interest rates in the last 15 months, the tech sector was particularly brilliant amid the AI industry boom.

On trading, Dow Jones rose 0.1%, or 18 points as of 16:12 GMT to 33,585, as S&P 500 rose 0.2%, or 9 points to 4,283, as NASDAQ climbed 0.3%, or 41 points to 13,270.