Investing.com - Gold dipped in Asia on Wednesday as investors sought the sidelines ahead of next week's Federal Reserve review of interest rates.
On the Comex division of the New York Mercantile Exchange, gold for June delivery dropped 0.17% to $1,252.20 a troy ounce.
Silver futures for May delivery dropped 0.22% to $16.395 a troy ounce, while copper futures for May delivery eased 0.13% to $2.222 a pound.
In Japan, the adjusted trade balance for March showed a surplus of ¥280 billion, narrower than the ¥450 billion seen and an overall trade balance surplus of ¥755 billion, a second straight gain and also narrower than the ¥835 billion expected. Imports dropped 14.9%, less than the 16.2% year-on-year expected, but a 15th straight drop, and exports fell 6.8%, a tad weaker than a 6.9% decline seen, a sixth straight monthly drop.
Overnight, gold surged more than $25 an ounce on Tuesday, as the dollar continued its prolonged slump and silver soared to a fresh 10-month high, each providing a considerable boost to the precious metal.
With the sharp gains, gold enjoyed its strongest one-day session in more than a month. Gold is now up nearly 19% since the start of the year and is on pace for one of its strongest opening halves in more than a decade.
At the same time, housing starts fell precipitously by 8.8% last month to 1.089 million, also far below analysts' forecasts of 1.167 million. Within the data, there were wholesale declines in starts across the U.S. with the exception of the Northeast region. The weak readings could dampen analyst sentiments heading into Wednesday's release of existing home sales for the month of March. Analysts expect sales to increase modestly to 5.268 million, following sharp declines of 7.1% in February.
Gold could remain in a holding pattern over the next week ahead of the Federal Open Market Committee's (FOMC) two-day meeting on April 26-27.
Although the Federal Reserve is not expected to raise short-term interest rates at the meeting, the U.S. central bank could provide hints on whether it will approve a rate hike at a subsequent meeting in June. Gold has jumped approximately 3% since Fed chair Janet Yellen sent strong indications in late-March that the U.S. central bank will express extreme caution with the timing of future rate hikes in the near-term future.
Any rate hikes this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.