NEW YORK: Gold prices traded a tight range on Monday as traders braced for a widely anticipated interest rate hike along with clues on future monetary policy from the Federal Reserve this week.

Spot gold was mostly unchanged at $1,959.39 per ounce by 10 a.m. EDT (1400 GMT). US gold futures fell 0.3% to $1,961.20. “Gold is slow and steady, with traders betting that the Fed is getting close to their point where they stop hikes,” said Bob Haberkorn, senior market strategist at RJO Futures.

Bullion may have found some safe-haven demand after Russia destroyed Ukrainian grain warehouses on an export route for Kyiv after pulling out of the Black Sea grain deal last week, Haberkorn added.

But the focus was still on the Fed’s decision on interest rates on Wednesday, followed by the European Central Bank on Thursday, with both seen hiking rates.

Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion.

“Any dovish surprise, particularly from the Fed, could be positive for gold, with good chances of seeing a new attack to the $2,000 mark,” said Carlo Alberto De Casa, market analyst at Kinesis Money, in a note.

The dollar index inched 0.2% higher, limiting gold’s upside by making it more expensive for holders of other currencies.

Gold priced in euros hit its highest since July 5 earlier in the day after data showed euro zone business activity shrank much more than expected in July.

Silver fell 0.9% to $24.36 per ounce, platinum slid 0.7% to $955.00 and palladium dropped 0.5% to $1,284.14.

UBS analysts in a note predicted platinum would be under-supplied for the rest of 2023 due to substitution in autocatalysts and lower South African production.