On Wednesday gold traded at more than four-months low before Fed's upcoming statement, as investors expect the central bank will signal a June
rate hike by dropping a pledge to be "patient" from its statement later
in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery dipped $1.90, or 0.17%, to trade at $1,146.20 a troy ounce during European morning hours. Prices held in a range between $1,144.90 and $1,152.00.
Yesterday, gold fell to $1,141.60, a level not seen since November 7, before settling at $1,148.20, down $5.00, or 0.43%. Futures were likely to find support at $1,130.40, the low from November 7, and resistance at $1,159.30, the high from March 17.
The central bank is expected to announce its federal funds rate and publish its rate statement, which outlines economic projection and the factors affecting the monetary policy decision.
Janet Yellen, the Fed Chair, is to hold what will be a closely watched press conference 30 minutes after the release of the statement.
The majority of analysts believe the Fed will evade the word "patience" and pave the way for an interest rate hike as early as in June. Hopes for higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
In the meantime, silver futures
for May delivery slumped 8.1 cents, or 0.52%, to trade at $15.49 a troy
ounce.
On Tuesday, silver fell 3.9 cents, or 0.25%, to close at $15.57.
Elsewhere on the Comex, copper for May delivery dropped 5.1 cents, or 1.94%, to trade at a three-week low of $2.582 a pound as concerns over a slowdown in demand from top consumer China weighed.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
