Investing.com - Gold prices held steady below the $1,100-level on Wednesday, as investors looked ahead to the Federal Reserve’s monetary policy statement due later in the session for fresh signals on the timing of a U.S. interest rate hike.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange inched up $1.00, or 0.09%, to trade at $1,097.70 a troy ounce during European morning hours.
A day earlier, gold dipped 20 cents, or 0.02%, to close at $1,096.70. Futures fell to a five-and-a-half year low of $1,072.30 on July 24.
Also on the Comex, silver futures for September delivery tacked on 2.3 cents, or 0.16%, to trade at $14.66 a troy ounce.
Fed officials are expected to provide further signals that the central bank could raise rates as soon as September if the economy continues to improve as expected when it releases its rate statement later in the session.
Gold has been under heavy selling pressure in recent months amid speculation the Fed will hikes rates for the first time in nine years this autumn.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.2% to 96.96 early on Wednesday.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere in metals trading, copper for September delivery inched up 0.6 cents, or 0.24%, to trade at $2.408 a pound during morning hours in London. Prices fell to a six-year low of $2.336 on Monday.
The Shanghai Composite took investors on another volatile ride on Wednesday, rising more than 1% after the open, only to turn slightly negative after the midday break, and then rise again to end up more than 3%.
Equity markets in China plunged sharply earlier this week, forcing policymakers to intervene and provide measures to boost liquidity and calm investors.
On Monday, the Shanghai Composite tumbled 8.5%, the biggest one-day drop since February 2007, amid reports that government buying of stocks and securities has slowed.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.