Gold prices drifted lower on Wednesday, as the dollar held steady with traders looking ahead to the U.S. Federal Reserve’s interest rate decision and its accompanying statement for further direction.
It is widely expected that the Fed will raise interest rate by 25 basis points, hiking it for the third time this year.
The accompanying statement from the Fed and the press conference by Jerome Powell later in the day are expected to provide clues about future rate increases and the outlook for the economy.
The dollar rose against most major currencies early on in the session, but pared some gains subsequently. The dollar index advanced to 94.00, gaining over 0.8%, before retreating to around 93.75.
Gold futures for December ended down $6.00, at $1,199.10 an ounce, settling below the $1,200 mark for the first time in seven sessions.
On Tuesday, gold futures ended up $0.70, or 0.06%, at $1,205.10 an ounce.
Silver futures for December settled at $14.401 an ounce, losing $0.091 for the session.
Copper futures for December ended up $0.0045, at $2.8280 per pound.
In the event of the Fed hinting at a slow pace of future rate hikes or suggesting that it is unlikely to tighten its policy any further in the foreseeable futures could push the dollar down and drive up the yellow metal.
Meanwhile, traders are closely tracking the developments on the U.S.-China trade war front for near term direction.