Gold prices dip in early Asia with focus squarely on Fed language

Investing.com - Gold prices eased in Asia on Wednesday with investors focused on the results of a Federal Reserve meeting later in the day that might shift language on the outlook for interest rates.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at $1,195.40 a troy ounce, down 0.13%, after hitting an overnight session low of $1,188.00 and off a high of $1,223.80.

Overnight, gold futures dropped on Tuesday after investors shrugged off disappointing housing data that would have otherwise boosted prices and jumped to the sidelines ahead of the Federal Reserve's statement on interest rates and monetary policy due out Wednesday.

Low interest rates make gold an attractive hedge to a weaker dollar.

Those sentiments quickly faded on the notion that when viewed from the long term, the U.S. housing sector continues to recover despite potholes here and there.

The Census Bureau reported earlier that the number of housing starts fell to 1.028 million units from 1.045 million in the preceding month whose figure was revised up from 1.009 million.

Analysts had expected the number of housing starts to rise to 1.030 million last month.

Building permits took a similar turn for the worse.

The Census Bureau reported that the number of building permits issued in November fell to 1.035 million from 1.080 million in the preceding month .

Analysts were expecting the number of building permits issued to fall to 1.060 million last month.

Later in the session, investors jumped to the sidelines to await the Federal Reserve's statement on monetary policy and interest rates due out on Wednesday, which sent gold back into negative territory.

Despite disappointing economic indicators here or there, the overall economy continues to improve, and many investors were betting the Fed will hint a need to further do away with ultra-loose monetary policies that have supported the yellow metal since the 2008 financial crisis.

Silver futures for March delivery fell 0.27% at $15.713 a troy ounce. Copper futures for March delivery were flat at $2.864 a pound.