By Ashitha Shivaprasad
May 1 (Reuters) – The price of gold stabilized on Monday as the dollar gave back some of its gains as traders were cautious and avoided making big bets ahead of the Federal Reserve’s decision to raise interest rates. interest in the middle of this week.
* Spot gold was little changed at $1,989.06 an ounce at 1204 GMT, after hitting a session low of $1,976.89. US gold futures were down 0.1% at $1,997.20.
* The dollar index fell slightly, reducing pressure on gold.
* The Federal Open Market Committee (FOMC) will meet on May 2-3, and investors are expecting an interest rate hike of 25 basis points.
* Although bullion is known as an inflation hedge, rising rates tend to make the gold metal, which does not yield interest, less attractive.
* Investors also appreciated JPMorgan Chase & Co.’s announcement that it had acquired a substantial majority of the assets and assumed certain liabilities of First Republic Bank.
* The price of gold rose more than 1% in April as concerns about turbulence in the US banking sector increased its attractiveness as a safe haven for investors.
* On the physical front, India’s gold imports from the United Arab Emirates could rise with better use of a trade deal between the two countries, Indian Commerce Secretary Sunil Barthwal said at an event on Monday.
* Among other precious metals, spot silver was up 1% at $25.29, platinum was up 0.5% at $1,079.19, while palladium was flat at $1,500.48.
* Many Asian and European markets were closed on Monday for the May 1 holiday.
(Reporting by Ashitha Shivaprasad and Arundhati Sarkar in Bengaluru; Editing in Spanish by Ricardo Figueroa)
