Investing.com - Gold prices traded near the lowest levels in more than five years on Tuesday, as investors looked ahead to the Federal Reserve’s monetary policy statement for any fresh indications on when it may start to hike interest rates.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange shed $2.60, or 0.24%, to trade at $1,094.30 a troy ounce during U.S. morning hours. Gold hit $1,072.30 last Friday, a level not seen since February 2010.
Also on the Comex, silver futures for September delivery declined 5.5 cents, or 0.38%, to trade at $14.55 a troy ounce.
The Federal Reserve kicks off its two-day meeting later in the day, with a monetary policy statement due on Wednesday, as market players look for any fresh indications on when the central bank may start to hike interest rates.
Fed Chair Janet Yellen has said the central bank could raise rates as soon as September if the economy continues to improve as expected.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve will raise interest rates for the first time in nine years as soon as September.
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 0.4% to 97.01 early on Tuesday, moving off Monday's lows of 96.36.
Elsewhere in metals trading, copper for September delivery tacked on 1.7 cents, or 0.74%, to trade at $2.371 a pound during morning hours in New York. On Monday, copper tumbled to $2.336, a level not seen since June 2009.
The Shanghai Composite took investors on a roller coaster ride on Tuesday, plunging nearly 5% after the open, only to rebound into positive territory ahead of the midday break, and then drop again in afternoon trade to end down 1.7%, despite expectations for more government support.
The People's Bank of China said in a statement before the market opened Tuesday it would act to stabilize market expectations.
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.
Equity markets in China plunged sharply earlier this month, forcing policymakers to intervene and provide measures to boost liquidity and calm investors.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, formal talks between Greece and its international creditors on a new €86 billion bailout package got underway in Athens.
A new agreement must be reached before August 20 when Greece must repay more than €3 billion to the European Central Bank.