Gold
futures ended lower Thursday, bucking a trend that has seen the
precious metal record modest back-to-back gains, as investors grew more
wary ahead of the U.S. Federal Reserve’s meeting next week.
February
gold shed $4.50, or 0.4%, to settle at $1,072 an ounce. Prices edged
higher over the past two trading sessions. So far this month, the metal
has now seen an equal number of up days as down days.
The
gold often trades opposite the direction the dollar, as a strong dollar
raises the cost of buying the metal for investors using other
currencies.
Market
participants say gold prices had been lifted in recent sessions by
recent weakness in the dollar compared with the euro % The euro climbed
after European Central Bank President Mario Draghi disappointed markets
last Thursday when he failed to deliver a more expansive stimulus
package than the market was expecting.
Still,
expectations that the Fed will decide to hike interest rates at the
conclusion of its meeting this Wednesday has been growing, keeping
sentiment on gold mainly bearish.
Higher
interest rates increase the cost of storing commodities, and make them
less attractive for investors seeking better returns across assets.
Higher rates can also boost the dollar, which would make
dollar-denominated gold even less attractive.
On Thursday, the ICE U.S. Dollar Index headed higher, weighing gold prices, but it’s still down about 0.3% for the week so far.
Meanwhile,
March silver lost 7.9 cents, or 0.6%, to finish at $14.11 an ounce.
March copper tacked on less than a penny to $2.073 a pound. January
platinum shed $9.90, or 1.1%, to $855.90 an ounce and March palladium
fell $10.10, or 1.8%, to $542.25 an ounce.
Source: MarketWatch
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