Gold lower in early U.S. trade as Fed statement looms; Dollar edges higher

Gold lower in early U.S. trade as Fed statement looms; Dollar edges higher

29 July 2015, 16:24
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The greenback edged higher in early U.S. trade Wednesday with the main focus on a FOMC statement, while gold was pressured.

A policy statement from the Fed is expected at 2 p.m. Eastern.

Higher interest rates can provide a boost to the greenback because lifted rates increase the return on dollar deposits, making it more attractive to currency traders. However, for gold, higher rates can mute the appeal of the dollar-priced metal, which doesn’t bear interest, and would be more expensive to buyers in other currencies.

August gold lost $3.10, or 0.3%, at $1,093 an ounce on Comex after settling at $1,096.20 on Tuesday.

Elsewhere in the metals sector, platinum for October delivery lost $1.90, or 0.2%, to $984.50 an ounce from a settlement on Tuesday of at $986.40, while September palladium gained $1.60, or 0.3%, to $623.20 an ounce from a Tuesday close of $621.60 an ounce

September copper was one penny higher, or up 0.4%, at $2.41 a pound Wednesday from a settlement of $2.403 a pound in the previous session.

Meanwhile, US dollar index was last at 96.86, higher 0.09%.

On Thursday investors will await fresh figures on second quarter growth in the U.S., which are expected to show that the economy recovered following a contraction in the first quarter after an unusually harsh winter.

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