Gold Settles Higher Ahead Of Fed Statement

(RTTNews) - Gold futures ended higher on Wednesday, even as investors await the outcome of the Federal Reserve policy meet later today, in one of the most closely-watched monetary policy announcements.

Federal Reserve Chair Janet Yellen will hold her customary press conference about 30 minutes after the release of the statement. She is expected to clarify the Fed's monetary policy, specifically provide further cues on interest rates.

Prices have tumbled in recent weeks amid speculation that the Fed will signal an interest rate hike this summer, either in June or August. The Fed is expected to remove its pledge to remain patient on interest rates in its announcement scheduled later today.

Gold for April delivery, the most actively traded contract, gained $3.10 or 0.3 percent to settle at $1,151.30 an ounce, on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for April delivery scaled an intraday high of $1,153.80 and a low of $1,144.90 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 747.98 tons on Wednesday from its previous close of 750.67 tons on Tuesday.

On Tuesday, the precious metal ended at $1,148.20 an ounce, down $5.00 or 0.4 percent, ahead of the U.S. Fed Reserve's two-day monetary policy meet outcome.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 99.36 on Wednesday, down from its previous close of 99.65 on Tuesday in late North American trade. The dollar scaled a high of 99.80 intraday and a low of 99.12.

The euro trended higher against the dollar at $1.0710 on Wednesday, as compared to its previous close of $1.0598 in North American trade late Tuesday. The euro scaled a high of $1.0672 intraday and a low of $1.0581.

In economic news, eurozone merchandise trade surplus for January rose sharply from the same month last year as exports stagnated and imports declined, data from Eurostat showed Wednesday. The unadjusted trade surplus grew to EUR 7.9 billion from EUR 0.1 billion a year ago. Exports remained unchanged during the period, while imports fell 6 percent.

Eurozone construction output increased for the second straight month in January, at a faster pace, data from Eurostat showed Wednesday. Output in the construction sector climbed 1.9 percent month-on-month in January, much faster than December's 0.2 percent increase, which was revised from a 0.8 percent decline. In November, production had fallen 0.4 percent.

The U.K. unemployment rate remained at the lowest level in more than six years and the employment rate hit the highest since 1971 during three months to January. The ILO jobless rate came in at 5.7 percent in three months to January, the same rate as in October to December period, the Office for National Statistics said Wednesday. It was expected to fall to 5.6 percent. Nonetheless, the rate was below the 6 percent seen in the quarter ending October and this was the lowest rate in more than six years.

Meanwhile, UK Chancellor of the Exchequer George Osborne raised the economic growth forecasts for this year and next, but warned that any adverse development in Greece could significantly affect the economy. The growth forecast for this year was raised to 2.5 percent from the 2.4 percent projected by the Office for Budget Responsibility in its December autumn statement. The projection for next year is forecast at 2.3 percent from 2.2 percent previously. Growth is seen improving to 2.4 percent by 2019.

UK's unemployment rate was forecast to fall to 5.3 percent this year, while inflation forecast was revised down to 0.2 percent.

The Organization for Economic Cooperation and Development said growth prospects in the major economies look slightly better than its previous assessment in November and called for a balanced policy to ensure sustainable growth.

The think tank projected the U.S. economic growth at 3.1 percent this year and 3 percent in 2016. The forecast for both 2015 and 2016 were left unrevised. Japan is projected to grow by 1 percent in 2015, faster than the prior estimate of 0.8 percent. In 2016, it is expected to expand 1.4 percent compared to the 1 percent projected in November.

The 19-nation bloc eurozone is estimated to expand 1.4 percent in 2015 and by 2 percent in 2016.

China, the second largest economy in the world, is expected to grow by about 7 percent in 2015. The estimate for 2015 was revised down from 7.1 percent, while that for 2016 was left unchanged at 6.9 percent.

India will grow by 7.7 percent in 2015 and by 8 percent in 2016, the OECD said. The figures were revised up from 6.4 percent and 6.6 percent, respectively.