Gold holds steady as market awaits Federal Reserve policy statement

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Investing.com - Gold prices held steady in afternoon trading on Wednesday as investors remained on the sidelines ahead of the Federal Reserve's statement on monetary policy and the fate of its USD85 billion monthly bond-buying program due out later in the day.

Bond purchases seek to boost recovery by pushing down interest rates, weakening the dollar in the process and making gold an attractive hedge.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,230.60 during U.S. afternoon hours, up 0.04%.

Gold prices hit a session low of USD1,227.10 a troy ounce and high of USD1,236.60 a troy ounce.

Gold futures were likely to find near-term support at USD1,227.10 a troy ounce, the earlier low, and resistance at USD1,251.40, Monday's high.

The February contract settled down 1.15% at USD1,230.10 a troy ounce on Tuesday.

The Federal Reserve is due to release its December statement on interest rates and whether or not it will make changes to its USD85 billion in monthly bond purchases.

Investors avoided gold ahead of time, as a decision to taper the pace of its asset purchases could lead to price swings, while a decision to punt scaling back the stimulus program could send prices gaining.

Gold prices have fallen in recent sessions as investors priced in less monetary support from the U.S. central bank, though uncertainty as to how the precious metal will react to an actual announcement allowed for quiet but edgy trading.

Investors were eager to digest Fed language in the report as well.

Elsewhere on the Comex, silver for March delivery was up 0.80% at USD19.998 a troy ounce, while copper for March delivery was down 0.04% and trading at USD3.320 a pound.









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This article appears in: Investing , Forex and Currencies

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