Gold up slightly as Fed ponders on monetary policy

Gold futures on the COMEX division of the New York Mercantile Exchange rose slightly on Tuesday as investors awaited the outcome of the U.S. Federal Reserve's monetary policy meeting.

The most active gold contract for June delivery increased 1.5 U.S. dollars, or 0.12 percent, to settle at 1,257 dollars per ounce.

The U.S. Federal Reserve started its scheduled two-day meeting on Tuesday, which is closely watched for clues on the pace of future interest-rate hikes.

Gold futures staged a minor rebounce Tuesday following a deep plunge the previous day in response to an initial forecast for real GDP growth at 4.3 percent in the second quarter of 2017, as released by the Federal Reserve Bank of Atlanta.

The significant increase in GDP growth may boost the pace of future interest-rate hikes, said some analysts, while wall street investors expect the Fed to leave rates on hold.

Tuesday's rebounce of gold futures was curbed as the U.S. Dow Jones Industrial Average continued to rise by 31.10 points, or 0.15 percent as of 1825 GMT. Analysts note that when equities post gains, the precious metal usually falls.

All eyes now focus on the outcome of the Feb policy meeting, expected to be announced Wednesday afternoon.

In case of rising interest rates, the U.S. Dollar will get a boost and gold futures fall as the precious metal, measured by the dollar, becomes more expensive for investors. Endit