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Gold little changed near 3-week high with Fed, Cyprus in focus

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Investing.com - Gold futures were little changed near the previous session's three-week high on Tuesday, as the Federal Reserve was scheduled to begin a two-day policy meeting, while concerns over a controversial bailout deal for Cyprus remained in focus.

Gold prices struggled for upside traction due to a slightly stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.15% to trade at 83.00.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,603.10 a troy ounce during European morning trade, down 0.1% on the day.

Prices held in a tight USD5-trading range between USD1,601.70 a troy ounce, the daily low and a session high of USD1,606.00. Comex gold prices rose to USD1,610.20 a troy ounce on Monday , the strongest level since February 27.

Gold prices were likely to find support at USD1,560.60 a troy ounce, the low from March 8 and near-term resistance at USD1,614.40, the high from February 27.

Market players were looking ahead to the Federal Reserve's 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.

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, concerns over a highly criticized bailout plan for Cyprus continued to enhance the safe haven appeal of the precious metal.

Gold prices jumped 1% on Monday following news that a one-time tax was to be imposed on bank deposit holders as part of a EUR10 billion bailout deal for Cyprus.

The parliament in Cyprus was to vote on whether to approve the tax proposal later in the day.

Elsewhere on the Comex, silver for May delivery was little changed to trade at USD28.86 a troy ounce, while copper for May delivery declined 0.45% to trade at USD3.413 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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