Gold edges lower as market waits for Federal Reserve policy decision

Gold edges lower as market waits for Federal Reserve policy decision

Submitted by caseyb23 on Tue, 07/30/2013 - 23:32

Gold edges lower as market waits for Federal Reserve policy decision

Investing.com – Gold prices moved lower on Tuesday as investors avoided the metal and remained parked in the dollar to await the Federal Reserve's decision on monetary policy Wednesday, with many hoping the U.S. central bank will provide some clue as to when it may begin tapering stimulus programs.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,325.45 during U.S. afternoon hours, down 0.31%.

The December contract settled up 0.58% at USD1,329.60 a troy ounce on Monday.

Gold futures were likely to find support at USD1,308.75 a troy ounce, Thursday's low, and resistance at USD1,338.45, Monday's high.

Markets were quiet as investors remained on the sideline to see if the Federal Reserve makes any indication over when stimulus programs will end.

Stimulus programs such as the Fed's USD85 billion monthly asset-purchasing plan tend to weaken the dollar to spur recovery, making gold an attractive hedge.

Data released earlier Tuesday depicted a U.S. economy on the mend though doubts if recovery is going strong enough to prompt the Fed to wind down stimulus measures kept investors camped out in the dollar until the Fed's decision becomes public.

Earlier Tuesday, the Standard & Poor's/Case-Shiller Composite 20-city house price index rose by an annualized rate of 12.2% in May from 12.1% the previous month, compared to expectations for an increase to 12.4%.

While the figure missed market expectations, the numbers were strong enough to boost hopes for a more robust and sustained U.S. economic recovery, which gave the greenback some support and softened gold.

Elsewhere, the Conference Board research group said that its index of U.S. consumer confidence fell to 80.3 in July from 82.1 in June, whose figure was revised up from 81.4.

Analysts had expected consumer confidence to remain unchanged at 81.4 last month, which kept some expectations alive that dollar-weakening stimulus measures will stay in place.

Elsewhere on the Comex, silver for September delivery was down 0.84% at USD19.697 a troy ounce, while copper for September delivery was down 2.13% and trading at USD3.041 a pound.