Gold prices fell in European trade on Wednesday for the first session in three days off two-week highs on profit-taking and under pressure from the stronger dollar.

Gold is heading for the first monthly loss since September, however the losses will depend on the results of the Federal Reserve's policy meeting this week.

Bearish remarks by the Fed will bolster the case for an interest rate cut in March, hurting both the dollar and US treasury yields and providing support to gold prices.

Gold Prices Today

Gold prices fell 0.2% to $2,032 an ounce, with a session-high at $2,038, after rising 0.2% on Tuesday, hitting a two-week high at $2,048 an ounce as US treasury yields lost ground.

The Dollar

The dollar index rose 0.25% on Wednesday, approaching six-week highs at 103.82 against a basket of major rivals, pressuring greenback-denominated gold futures.

The gains came after a string of strong US data, which showcases the flexibility of the US economy, while also hurting the odds of early US interest rate cuts this year.

Gold is down 1.5% so far this month, heading for the first monthly loss since September.

US Rates

The markets are pricing in a 45% chance for a March 20 interest rate cut by the Federal Reserve, while pricing in an 89% chance for such a cut in May.

Overall, traders expect a total of 130 basis points of interest rate cuts in 2024, down from 160 basis points in previous forecasts.

The Fed

The Federal Reserve is wrapping up its two-day policy meeting today, expected to maintain interest rates flat at 5.5%, already the highest since 2001, while providing clues on the future of interest rates and policies.

The SPDR

Gold holdings at the SPDR Gold Trust fell 2.01 tones yesterday, the third decline in a row, to a total of 852.88 tonnes, the lowest since October 18.