Mubasher: Gold prices rose on Tuesday, as the US dollar moved away from multi-week highs, as markets awaited the outcome of Federal Reserve’s two-day policy meeting, Reuters reported.

By 10:22 am GMT, spot gold rose by 0.47% to $1,345.94 per ounce, while US gold futures climbed by $1,349.40 per ounce.

“There are expectations that the Fed will cut interest rates, which has weakened the dollar and remains a main driver for prices,” Argonaut Securities analyst Helen Lau was quoted by the news agency.

The US dollar was slightly pressured by the Federal Reserve Bank of New York’s business gauge showed a sharp drop in manufacturing conditions, marking the weakest reading in more than two years.

 At 10:28 am, the dollar index, which tracks the greenback against a basket of six major currencies, rose by 0.12% to 97.68.

With the current level, some fluctuations in gold prices could be seen, amid mixed expectations on the Fed’s rate cut, according to Argonaut’s Lau.

Markets already priced in more than two 25-basis-point rate cuts by the end of this year.

Bets on interest rate cut have been on the rise as the US-China trade conflict flared, signs of slowdown in the US economy and President Donald Trump’s push to loosen policy.

All of these factors gave a push to the yellow metal, which gained around 6% since, hitting a record low of $1,265.85 per ounce, earlier in May.

Moreover, the Fed is projected to retain borrowing costs unchanged this meeting, a move that could pave the way for a rate cut later this year.