Investing.com -- Gold erased slight overnight losses on Wednesday amid a slew of soft economic data in the U.S. as investors awaited the Federal Reserve's latest interest rate decision shortly after the close.
On the Comex division of the New York Mercantile Exchange, Gold for December delivery traded between $1,323.20 and $1,336.65 an ounce before settling at $1,334.25, up 5.95 or 0.45% on the session. Since hitting 28-month highs earlier this month, Gold has slid nearly 2% as investors have piled into global equities in broad risk-on trade. Still, the precious metal is up by approximately 25% year to date and is on pace for one of its strongest years in a decade.
Gold likely gained support at $1,253.70, the low from June 24 and was met with resistance at $1,368.60, the high from July 7.
Investors reacted to weak factory and housing data on Wednesday morning, ahead of the Fed's closely-watched decision. In June, new Durable Goods Orders slumped by 4.0% on the month, falling considerably below consensus estimates of a 1.3% decline. At the same time, core orders were also soft, falling by 0.5% as core capital goods posted their 17th year-over-year decline over the last 18 months. The sharp declines were slightly offset by a strong performance from vehicles, which reported a 2.6% gain on the month.
Also on Wednesday, the National Association of Realtors said its Pending Home Sales Index rose by 0.2% last month, far below consensus forecasts of 1.3%. The subdued reading also follows a decline of 3.7% in May. The losses were concentrated in the Western region of the U.S., which reported a 1.8% drop in sales from the same level 12 months ago.
On Wednesday afternoon, the Federal Open Market Committee (FOMC) is widely expected to leave its benchmark interest rate at a targeted range between 0.25 and 0.50% for their fifth consecutive meeting. The CME Group's (NASDAQ:CME) Fed Watch tool placed the probability of a July rate hike at 3.6%, up slightly from 2.4% during the previous session. Even if the FOMC stands pat, the Committee could provide hints on the timing of its next rate hike. There is currently a 20.3% chance the FOMC will raise rates at their September meeting along with a 40.4% probability the U.S. central bank will approve a rate hike at a meeting in December, according to the CME Group.
Any rate hikes by the FOMC this year are viewed as bearish for gold, which struggles to compete versus high-yield bearing assets in periods of rising rate environments.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, was relatively flat on Wednesday hovering at 97.28 in U.S. afternoon trading. The index remains near four-month highs.
Dollar-denominated commodities such as Gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for September delivery surged 0.315 or 1.60% to $19.998 an ounce.
Copper for September delivery plunged 0.040 or 1.82% to $2.185 a pound.