Gold Futures were seen trading low on Tuesday as investors focus on the two-day Federal Reserve (fed) meeting, where they could get a possible hint as to when the central bank intends to start scaling back on its stimulus program.
The yellow metal futures fell 0.46% lower, trading at $1,323.40 an ounce, while the silver futures were down 1.36% at $19.595 an ounce at the time of writing.
Gold correlates inversely with the US dollar and dropped after trading flat as the European trading hours began. The US dollar index has had a slight advance due to investor’s assumptions ahead of the Federal Reserve meeting.
The US dollar index slightly strengthened against some of its major counterparts, adding 0.06% to 81.710 at the time of writing. The US dollar index remains low compared to the near three-year high of 84.75 as of the beginning of the month of July.
Holdings in the largest gold-backed exchange-traded fund SPDR Gold Trust remained unchanged at 927.35 tonnes on Monday. Volume of the holdings dropped just under 1,000 in the month of June.
With worries regarding the Fed’s decision on scaling back the monetary stimulus program, the yellow metal dropped by more than 20% this year. Gold futures reached a three-year low in the month of June.
Prices of the yellow metal reached a five-week high of $1,347.69 an ounce on July 23rd & July 24th.
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