Gold edges higher ahead of this week’s Fed rate decision meeting (NYSEARCA:GLD)

Gold futures rose Monday, helped by a weaker dollar, as investor focus turned to the Federal Reserve’s upcoming policy meeting and U.S. non-farm payrolls data due this week for cues on the central bank’s interest rate projections.

Gold fell more than 2% last week in the wake of cooler Middle East tensions and fading hopes for early U.S. rate cuts this year, and the Fed is expected to hold its benchmark interest rate steady at 5.25%-5.5% at the end of its two-day policy meeting on Wednesday.

“Markets have already discounted a ‘no rush’ profile for rate cuts, whereas we see a low likelihood of the Fed’s next move morphing into a hike, suggesting the scope for Fed funds expectations to weigh on gold markets has declined,” according to TD Securities strategist Daniel Ghali, who foresees more upside to prices as “Shanghai traders are back on the bid in gold” with bullish bets heading back toward record highs.

Front-month Comex gold (XAUUSD:CUR) for May delivery ended +0.4% to $2,345.40/oz, while front-month May Comex silver (XAGUSD:CUR) also settled +0.4% to $27.373/oz.

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It was the third consecutive gain for gold futures, but gold shares are showing signs of consolidation, even as concerns over the fate of interest rate cuts this year mean gold prices should maintain historically high levels, StoneX analyst Rhona O’Connell of StoneX said.

“Gold is in a much-needed period of consolidation, and it looks clear that the previous ‘ceiling’ in the price is now a ‘floor,’ according to O’Connell.