Gold prices rose in European trade on Tuesday on track for the second straight profit and heading towards $2200 as the dollar loses ground against major rivals.

The dollar is falling on bets the Fed will start cutting US interest rates at the June meeting.

Prices

Gold Prices rose 0.4% to $2180 an ounce, with a session-low at $2167, after rising 0.3% on Monday, the first profit in three days as the dollar stalls.

The Dollar

The dollar index fell 0.15% on Tuesday away from five-week highs at 104.50 against a basket of major rivals.

The dollar fell following bearish remarks by Fed officials, which bolstered the odds of a 0.25% US interest rate cut in June.

Fed Remarks

Fed Chicago President Austan Goolsbey said on Monday that at the Fed’s policy meeting last week, there were suggestions for three interest rate cuts this year.

However, the Fed will be cautious and will wait for more data before cutting rates.

US Rate Prospects

The odds of a 0.25% Fed interest rate cut in May stood at 8%, while the odds of such a cut in June stood at 70%.

Traders overall expect 75 basis points of interest rate cuts in 2024.

Now investors await important US personal spending data to get a better view of inflation and the likely path ahead for policies.

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 535.33 tonnes.