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Gold trades above $1,200 ahead of FOMC minutes

Published 04/08/2015, 03:09 AM
Updated 04/08/2015, 03:09 AM
© Reuters.  Gold futures hold steady ahead of Fed minutes

© Reuters. Gold futures hold steady ahead of Fed minutes

Investing.com - Gold prices were little changed on Wednesday, as investors adopted a cautious approach before the release of minutes from the Federal Reserve's latest policy meeting later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery tacked on 40 cents, or 0.03%, to trade at $1,211.00 a troy ounce during European morning hours. Prices held in a tight range between $1,207.90 and $1,211.70 an ounce.

Futures were likely to find support at $1,178.20, the low from March 31, and resistance at $1,224.50, the high from April 6. A day earlier, gold lost $8.00, or 0.66%, to close at $1,210.60 as a broadly stronger U.S. dollar weighed.

Investors will be focusing on Wednesday’s minutes of the latest Fed meeting for further indications on the central bank's next policy moves after Friday's downbeat jobs data fuelled uncertainty over the timing of a rate hike.

The Labor Department reported Friday that the U.S. economy added 126,000 new jobs in March, less than half of February’s gain and the smallest increase since December 2013.

Gold prices have been well supported in recent sessions amid expectations U.S. interest rates will rise at a slower pace than previously thought.

Futures are up nearly 6% since hitting a recent low of $1,140.60 on March 17, as indications that the U.S. economy slowed in the first quarter fuelled bets the Federal Reserve will hold off on hiking interest rates until late 2015.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.5% to trade at 97.75 early on Wednesday.

Gold often moves inversely to the U.S. dollar, as prices become more expensive for buyers using other currencies.

Elsewhere on the Comex, silver futures for May delivery inched up 2.2 cents, or 0.13%, to trade at $16.86 a troy ounce, while copper for May delivery declined 2.0 cents, or 0.73%, to trade at $2.743 a pound.

Latest comments

Will be down below 1200 very soon
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