Gold prices edged lower while the dollar was little changed as market participants awaited key central bank meetings due later this week,on Monday .
The dollar remained unchanged on Monday ahead of several key central bank meetings coming up this week.
The U.S. Federal Reserve concludes its policy meeting on Wednesday and is widely expected to reaffirm the outlook for further gradual rate rises, as the market is almost fully priced for a rate hike in September and expects a further move before the end of this year.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, was trading at 94.47 on Monday.
U.S. second-quarter GDP grew at 4.1%, marking the quickest pace of growth since 2014, although its impact on the dollar and gold prices seemed to be limited. Analysts questioned the sustainability of growth, however, as the benefits from fiscal stimulus on economic growth are expected to wane next year.
“While we expect the economy to remain strong in the near-term, we see growth slowing sometime next year as fiscal stimulus fades and tighter monetary conditions begin to bite,” BNP Paribas (PA:BNPP) said in a note to its clients on Friday.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding gold as it pays no interest.