Gold prices struggled near the prior session’s three-week lows in European morning trade on Wednesday, as market players looked ahead to the outcome of the Federal Reserve’s policy meeting for further clues on the timing of the next rate hike.
Comex gold futures lost around $1.00, or less than 0.1%, to $1,256.10 a troy ounce by 2:55AM ET (06:55GMT). Meanwhile, spot gold was at $1,254.80.
The yellow metal fell to its weakest level since April 10 at $1,252.60 on Tuesday as strong earnings and manufacturing data boosted risk appetite.
Also on the Comex, silver futures inched up 6.6 cents, or about 0.4% to $16.89 a troy ounce, after touching a more than three-month low of $16.80 a day earlier.
The Fed is not expected to take action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET (18:00GMT) on Wednesday.
The U.S. central bank will release its post-meeting statement as investors look for any change in language which could point more clearly to a June rate hike.
Besides the Fed minutes, Wednesday’ calendar also features the ADP private sector nonfarm payrolls report and the ISM non-manufacturing survey.
Market experts do not expect the Fed to raise interest rates again until June, especially in light of recent softening data.
Futures traders are pricing in around a 60% chance of a hike at the Fed’s June meeting, according to Investing.com’s Fed Rate Monitor Tool. Odds of a September increase was seen at about 80%.
The median Fed policymaker forecast is for two more rate increases by year-end, after already raising its benchmark interest rate once this year, by a quarter percentage point at its last policy meeting in March.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere in metals trading, platinum shed 0.2% to $923.90, while palladium added 0.5% to $817.62 an ounce.
Copper futures dipped 2.3 cents to $2.612 a pound.
