- U.S. dollar down 0.4%
- Markets pricing in Fed 25 bps rate hike in May
April 18 (Reuters) - Gold prices rose on Tuesday, buoyed by a weaker dollar, while investors looked for more clarity on the U.S. Federal Reserve's rate hike path ahead.
Spot gold rose 0.4 % to $2,002.72 per ounce by 0909 GMT. U.S. gold futures were also up 0.4% to $2,015.40.
"Gold's near-10% year-to-date climb has been largely predicated on its role as a safe haven as markets kept a wary eye over recession and financial instability risks," said Han Tan, chief market analyst at Exinity.
Bids for a fresh record high may be curtailed until there is greater certainty to Fed rate cuts later this year, Tan added.
The dollar, raising expectations of the U.S. central bank hiking rates in May.
This weighed on gold, pushing it to a two-week low, as a stronger dollar makes gold more expensive for holders of other currencies.
Benchmark yields were near three-week highs. Gold is considered a hedge against inflation and economic uncertainties, but higher interest rates dim the non-yielding bullion's appeal.
The CME FedWatch tool shows that markets are pricing in an 85.4% chance of a 25 basis point hike in May.
With the majority of U.S. data over the past few days pointing to an economic slowdown and a weakening dollar, the background influences remain supportive for gold, said StoneX analyst Rhona O'Conell in a note.
Focus will now be on comments from Fed officials this week before they enter a blackout period from April 22, ahead of the central bank's May 2-3 meeting.
Markets will also watch for reports from big U.S. banks later in the day after stellar results from other banks last week. .
Spot silver rose 0.1% to $25.13 per ounce, platinum gained 0.8% to $1,056.81 while palladium shot up 3.3% to $1,610.66.
Reporting by Kavya Guduru in Bengaluru; editing by Uttaresh Venkateshwaran
Source: Reuters