Investing.com - Gold struggled near one-week lows on Tuesday, ahead of a widely anticipated U.S. rate hike by the Federal Reserve.
The Fed is expected to raise interest rates for the first time in nearly a decade at the conclusion of its two day policy meeting at 2:00PM ET on Wednesday. The central bank will also release its latest forecasts for economic growth and interest rates.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for signals about the path of future rate hikes. Many in the market anticipate the pace of increases to be gradual amid concerns over tepid growth overseas and divergent monetary policies between the U.S. and other nations.
Gold for February delivery on the Comex division of the New York Mercantile Exchange slumped $1.50, or 0.14%, to trade at $1,061.90 a troy ounce during European morning hours. A day earlier, gold lost $12.30, or 1.14%, after falling to a session low of $1,058.10, the lowest since December 3.
The yellow metal is on track to post an annual decline of 10% in 2015, the third yearly loss in a row, as speculation over the timing of a Fed rate hike dominated market sentiment for most of the year. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Meanwhile, silver futures for March delivery dipped 2.0 cents, or 0.15%, to trade at $13.67 a troy ounce. Prices slumped to $13.62 on Monday, a level not seen since August 2009.
Elsewhere in metals trading, copper fell for the second straight day on Tuesday, as market players reduced exposure to risk-related assets ahead of the Federal Reserve's policy meeting.
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