Investing.com -- Gold futures ticked up to one-week highs before closing slightly lower on Thursday, as metal traders remained cautious ahead of a highly-anticipated decision by the Federal Open Market Committee on whether to raise its benchmark interest rate.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a tight range between $1,114.70 and $1,122.40 an ounce, before settling at 1,117.10, down 1.90 or 0.17%. A session earlier the precious metal surged more than $20 an ounce, amid soft U.S. inflation data, marking its strongest one-day move in more than a month. Over the last month of trading, gold is relatively flat, up by approximately 0.50% since August 17.
Gold likely gained support at $1,102.10, the low from Sept. 9 and was met with resistance at $1,144.70, the high from Sept. 1.
At 2 p.m. EST, the FOMC is scheduled to release its September monetary policy statement, where it could announce that it has decided to lift its benchmark Federal Funds Rate for the first time in nearly a decade. The rate, which banks use to lend to other institutions on overnight loans, has remained at its current level between zero and 0.25% since December, 2008.
Last month, Fed vice chairman Stanley Fischer indicated that there is good reason to believe that U.S. inflation will move higher as the temporary forces restraining it from a stronger dollar and falling energy prices continue to "dissipate further."
Inflationary gains last month were muted, however, as the Consumer Price Index ticked up by only 0.2% in August on a year-over-year basis. The U.S. Bureau of Labor Statistics also said on Wednesday that Core CPI, which strips out food and energy prices, rose by 0.1% on a monthly basis, below analysts' expectations for a 0.2% gain.
The Fed would like to see long-term inflation move toward its targeted goal of 2% before it normalizes monetary policy. In July, the Core PCE Index, the Fed's preferred gauge for long-term inflation, stood at 1.2%. Long-term inflation has remained under the Fed's 2% target for every month over the last three years.
Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in rising rate environments.
Meanwhile, initial jobless claims in the U.S. last week fell 11,000 to 264,000 during a shortened week for the Labor Day holiday. Analysts expected initial job claims to remain unchanged from the previous week at 275,000. Initial jobless claims remain near 40-year lows.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.15% on Thursday to an intraday low of 95.24, before rallying to 95.45 in U.S. afternoon trading. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for December delivery gained 0.105 or 0.67% to 14.990 an ounce.
Copper for December delivery gained 0.001 or 0.03% to 2.453 a pound.