Gold Ends Higher Ahead Of Fed Decision

(RTTNews) - Gold futures snapped a two-day loss to end higher on Wednesday, with investors seeking the safe haven appeal of the precious metal ahead of the Federal Open Market Committee policy meet outcome later today. The U.S. Federal Reserve is widely expected to further scale back its unprecedented bond buying program at the end of a two-day meeting this afternoon.

With unemployment rate down to 6.7 percent in December, most economists believe the Fed will trim its purchases by about $10 billion to $65 billion per month. Last month, the Fed tapered its program by $10 billion to $75 billion, citing improvements in the economy and progress towards its 6.5 percent unemployment benchmark.

Gold for February delivery, the most actively traded contract, gained $11.40 or 0.9 percent to close at $1,262.20 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for February delivery scaled an intraday high of $1,269.30 and a low of $1,248.50 an ounce.

Yesterday, gold settled lower lower for a second straight session tracking rising global equity markets after investors turned to the riskier asset after some upbeat consumer confidence data boosted sentiments. Although the precious metal briefly found support with some weak durable goods data from the U.S., the gains were capped with markets anticipating a further cut to the Federal Reserve's quantitative easing program at the end of its two-day policy meet.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 790.46 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.50 on Wednesday up from its previous close of 80.66 late Tuesday in North American trade. The dollar scaled a high of 80.82 intraday and a low of 80.44.

The euro traded lower against the dollar at $1.3669 on Wednesday, as compared to its previous close of $1.3670 late Tuesday in North America. The euro scaled a high of $1.3684 intraday and a low of $1.3604.

In economic news from the eurozone, German consumer confidence improved for the fifth month in a row in February as the domestic recovery gains momentum in the country, results of a survey by the market research group GfK said. The forward-looking consumer confidence index rose strongly to 8.2 points from an upwardly revised 7.7 points in January. The latest figure is the highest since August 2007. Economists had expected the score to remain unchanged at January's original reading of 7.6.

Separately, eurozone money supply growth eased unexpectedly in December, while loans to private sector declined for the 20th consecutive month, official data showed. M3, the broad monetary aggregate, grew 1 percent in December, after expanding 1.5 percent in November, the European Central Bank said. Economists were expecting the rate to rise to 1.7 percent.