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Gold futures ease down ahead of Federal Reserve; Cyprus in focus

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Investing.com - Gold futures eased down modestly during U.S. morning hours on Wednesday, but held near the previous session's three-week high as investors eyed the outcome of the Federal Reserve's policy meeting later in the day.

Uncertainty remained over the situation in Cyprus, where the country's parliament rejected a proposed bank deposit tax, which formed part of a EUR10 billion international bailout deal.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,608.20 a troy ounce during U.S. morning trade, down 0.2% on the day.

Prices held in a tight trading range between USD1,605.60 a troy ounce, the daily low and a session high of USD1,613.90. Comex gold prices rose to USD1,614.60 a troy ounce on Tuesday , the strongest level since February 26.

Gold prices were likely to find support at USD1,560.60 a troy ounce, the low from March 8 and near-term resistance at USD1,619.40, the high from February 26.

Market players were looking ahead to the outcome of the Federal Reserve's two-day policy meeting, as investors try to assess the central bank's attitude towards monetary stimulus.

Data on Friday showed that U.S. inflation was contained in February, leaving the way clear for the central bank to continue its bond-buying program.

Fed Chairman Ben Bernanke is to give a press conference after the release of the policy statement.

Moves in the gold price this year have largely tracked shifting expectations as to whether the Fed could bring quantitative easing to an end this year.

Meanwhile, in Cyprus, the government was holding talks aimed at finding an alternative solution after the parliament rejected a proposed bank deposit tax, a condition of a EUR10 billion international bailout deal.

Cyprus's Finance Minister Michalis Sarris said talks with his Russian counterpart on alternative means of financial support had been "very constructive".

The deputy head of the country's central bank said earlier that no decision had been taken on when banks, which have been shut since the weekend, would reopen.

Elsewhere on the Comex, silver for May delivery dipped 0.1% to trade at USD28.81 a troy ounce, while copper for May delivery rose 1% to trade at USD3.439 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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