Gold prices up in Asia ahead of Fed rate announcement

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Investing.com - Gold was steady to higher as investors bought ahead of Federal Reserve interest rate announcements later Wednesday that will set market direction.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at $1,300.60 a troy ounce, up 0.01%, after hitting an overnight session low of $1,298.10 and off a high of $1,314.40.

Data released overnight bolstered the dollar and in turn, pushed down gold, as the two assets tend to trade inversely with one another.


The Conference Board reported that its consumer confidence index rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007, defying consensus forecasts for a decline to 85.3.

The data sent investors betting that the Federal Reserve will conclude a policy meeting on Wednesday announcing fresh cuts to its monthly bond-buying program and deliver an upbeat take on the U.S. economy.

Fed asset purchases which have stimulated the economy off and on since the 2008 crisis, which, coupled with low interest rates, have weakened the dollar by sending investors to stocks, with gold serving as an attractive under such loose monetary policies.

While markets expect the Fed to wrap up its bond-buying program this year-likely some time in or around October-uncertainty still persists as to how much time will pass after stimulus programs conclude and rate hikes begin, with data driving investor guesses on Fed timetables.

Elsewhere in the U.S., investors took in stride the S&P/Case Shiller Home Price Index.

The 20-city composite index for May grew 9.3% year-over-year, down from April's 10.8% reading, while the 10-city index grew 9.4%, down from April's 10.9%, though markets have priced in slackness in the U.S. housing sector.

Silver for September delivery was up 0.12% at $20.605 a troy ounce. Copper futures for September delivery fell 0.02% at $3.220 a pound.

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This article appears in: Investing , Forex and Currencies

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