Gold Futures Settle Slightly Down Ahead Of Fed Policy Announcement

Gold futures settled slightly lower on Wednesday even as the dollar stayed a bit sluggish ahead of the Federal Reserve’s policy announcement.

The dollar index, which dropped to 103.19 in early New York session, recovered to 103.50 before drifting down again to around 103.40.

Gold futures for June ended down by $1.80 or about 0.1% at $1,868.80 an ounce, after moving between $1,861.10 and $1,872.20.

Silver futures for July ended lower by $0.263 at $22.402 an ounce, while Copper futures for July settled at $4.3380 per pound, gaining $0.0550.

Gold found some support as equities drifted down on risk aversion after the European Union proposed a phased oil embargo on Russia.

Caution ahead of monetary policy announcement from the Federal Reserve and the Bank of England rendered gold’s movements quite sluggish.

A report from the Institute for Supply Management showed the ISM Servicies PMI fell to 57.1 in April from 58.3 in March, although a reading above 50 still indicates growth in the sector. The decrease surprised economists, who had expected the index to inch up to 58.5.

A separate report released by payroll processor ADP showed U.S. private sector job growth slowed by more than expected in the month of April, increasing by 247,000 jobs after jumping by an upwardly revised 479,000 jobs in March.

Economists had expected private sector employment to surge by 395,000 jobs compared to the addition of 455,000 jobs originally reported for the previous month.

The Commerce Department also released a report showing the U.S. trade deficit widened to a new record in the month of March.

The report showed the trade deficit widened to $109.8 billion in March from a revised $89.8 billion in February. Economists had expected the deficit to widen to $107.0 billion from the $89.2 billion originally reported for the previous month.

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