PRECIOUS-Gold falls on cooling rate-cut bets with Fed meeting in focus

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Federal Open Market Committee meet from April 30-May 1

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By Brijesh Patel

- Gold prices eased on Monday on prospects of higher-for-longer U.S. interest rates as focus turns to the Federal Reserve policy meeting and U.S. non-farm payrolls data due this week for cues on the rate trajectory.

Spot gold XAU= was down 0.2% to $2,333.29 per ounce by 0953 a.m. ET (1353 GMT). U.S. gold futures GCcv1 were down 0.1% at $2,344.60.

"Gold market participants are essentially waiting for this Friday's non-farm payroll report. Markets are well priced for the notion that the Fed should be in no rush to cut rates given signs of sticky inflation and resilient growth," Daniel Ghali, commodity strategist at TD Securities, said.

A hotter-than-expected consumer price inflation report for March released earlier this month prompted traders to dial back on expectations for interest rate cuts from the Fed.

The Fed's two-day policy meeting starts from April 30. The Fed is seen holding its benchmark interest rate steady at 5.25% to 5.5% at the end of its meeting on Wednesday, according to CME FedWatch tool.

Higher rates reduce the appeal of holding non-yielding gold.

The U.S. non-farm payroll data due on Friday will also be closely watched to get more clarity on Fed rate-cut projections.

Gold fell by 2.2% last week amid cooling Middle East tensions and fading expectations for early U.S. rate cuts this year.

Meanwhile, analysts raised their 2024 gold price forecasts, expecting simmering geopolitical woes to coax investors to seek refuge in the safe haven asset and spur record-beating prices further, a Reuters poll showed.

Spot silver XAG= rose 0.1% to $27.19 per ounce. The metal fell by 5.2% last week before finding buy-side support at below the $27.00 mark, said Frank Watson, market analyst, Kinesis Money.

Spot platinum XPT= gained 2.1% to $935.49 per ounce, while palladium XPD= rose 1.3% to $966.23.

(Reporting by Brijesh Patel and Daksh Grover in Bengaluru; Additional reporting by Polina Devitt; Editing by Shounak Dasgupta)

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