Gold futures on the COMEX division of the New York Mercantile Exchange rose on Tuesday as traders prepared for the Federal Open Market Committee (FOMC) meeting results.
The most active gold contract for December delivery rose 0.4 U. S. dollars, or 0.03 percent, to settle at 1,318.2 dollars per ounce.
The U.S. Federal Open Market Committee (FOMC) meeting has begun and traders eagerly anticipate the results of the meeting, due to be announced in a press conference on Wednesday after the market' s close. Clarity is expected as in recent weeks, some Fed officials have been hinting at an increased pace for interest rate hikes.
Analysts say the market currently believe that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting.
Strength in the U.S. dollar put pressure on the precious metal as the U.S. Dollar Index rose by 0.14 percent to 96.00 as of 1700 GMT. The index is a measure of the dollar against a basket of major currencies.
Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors. Gold was put under pressure as the U.S. Dow Jones Industrial Average rose by 45 points, or 0.25 percent as of 1700 GMT.
Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains. The precious metal was prevented from falling further as a report released by the U.S. Department of Commerce on Tuesday showed housing starts decreasing to a worse-than-expected 1.142 million starts, and an also worse-than-expected 1.139 permits.
Analysts have blamed the decrease in the housing starts on flooding in the south of the United States. Investors are waiting for the release of the U.S. weekly jobless claims report, due to release on Thursday, and the PMI Manufacturing Index Flash, to be released on Friday.
Silver for December delivery fell 1.3 cents, or 0.07 percent, to close at 19.277 dollars per ounce. Platinum for October delivery added 7.2 dollars, or 0.70 percent, to close at 1,030.9 dollars per ounce.
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