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Gold down ahead of Fed meeting

Xinhua, July 26, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday ahead of the meeting of the U.S. Federal Reserve.

The most active gold contract for August delivery fell 3.9 U.S. dollars, or 0.29 percent, to settle at 1,319.50 dollars per ounce.

The precious metal was put under pressure as traders prepared for the Federal Open Market Committee meeting on Tuesday. Traders believe that the Fed will delay the previously expected July interest rate increase until 2017.

Previous Fed minutes led traders to believe that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CME Group's Fed-watch tool, the current implied probability of a hike from 0.50 to 0.75 is at 2 percent for the July meeting, 20 percent at the September 2016 meeting, 23 percent at the November 2016 meeting, and 45 percent at the December meeting.

Gold was prevented from falling further as the U.S. Dollar Index fell by 0.11 percent to 97.28 as of 19:30 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.

Traders are expecting the new home sales report to be released on Tuesday, the durable goods orders report on Wednesday along with the Federal Open Market Committee announcement. Thursday will have the international trade in goods report, as well as the weekly jobless claims, and Friday will see the release of the gross domestic product report.

Silver for September delivery fell 4.2 cents, or 0.21 percent, to close at 19.647 dollars per ounce. Platinum for October delivery remained unchanged, to close at 1,088.40 dollars per ounce. Enditem