Gold Ends Higher Ahead Of Fed Meet Outcome

(RTTNews) - Gold futures ended higher on Wednesday, with the outcome of the two-day U.S. Federal Reserve policy review meet due shortly. The uncertainty surrounding the quantitative easing program of the Fed kept investors on the sidelines, but some rare optimism was seen in the market that the Fed might just stop short of initiating a cut.

The Federal Reserve is scheduled to release its monetary policy statement at 2 pm ET following the conclusion of the 2-day meeting, with Chairman Ben Bernanke expected to address the customary post-meeting press conference at 2:30 pm ET.

Gold for February delivery, the most actively traded contract, gained $4.90 or0.4 percent to close at $1,235.00 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.

Gold for February delivery scaled an intraday high of $1,237.50 and a low of $1,227.00 an ounce.

Yesterday, gold settled near a three-week low on some upbeat economic data out of the U.S., even as investors anxiously awaited the outcome of the two-day U.S. Federal Reserve policy review meet.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 816.82 tons from 818.90 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.09 on Wednesday, up from 80.04 late Tuesday in North American trade. The dollar scaled a high of 80.20 intraday and a low of 80.01.

The euro traded lower against the dollar at $1.3757 on Wednesday, as compared to its previous close of $1.3768 late Tuesday in North America. The euro scaled a high of $1.3780 intraday and a low of $1.3732.

In economic news from the U.S., the Commerce Department said housing starts surged up 22.7 percent to a seasonally adjusted annual rate of 1.091 million in November from a rate of 889,000 in October. Economists had expected housing starts to come in at an annual rate of 955,000.

From the euro zone, German business sentiment improved in December in line with economists' expectations survey results published by the Ifo Institute revealed. The headline business climate index rose to 109.5 in December from 109.3 in November. The reading matched economists' forecasts.

Meanwhile, the U.K. claimant count fell slightly to 3.8 percent in November from 3.9 percent in October, the Office for National Statistics said. The rate matched economists' expectations. The number of people claiming Jobseeker's Allowance fell by 36,700 to 1.27 million, the lowest figure since January 2009. Economists were expecting a fall of 35,000.

Elsewhere, policymakers of the Bank of England unanimously decided to maintain the interest rate at 0.50 percent and quantitative easing at GBP 375 billion, the minutes of the meeting held on December 4 and 5 showed.