Gold holds steady as markets brace for Fed decision

Gold prices were little changed on Wednesday ahead of Federal Reserve`s latest policy announcement later in the day, while rejuvenating global equities made safety assets less lucrative to investors.

Spot gold was down 0.1 percent to $1,282.56 per ounce as of 10:40 a.m. EDT (1440 GMT), having hit a session low of $1,277.38 earlier in the session.

U.S. gold futures fell 0.1 percent to $1,284.40 an ounce.

Investors are awaiting the end of a two-day meeting by the U.S. Federal Open Market Committee (FOMC), after the central bank ended its three-year policy tightening drive last month, ditching projections for any interest rate hikes this year.

"We have the U.S. economy still producing robust data which could turn off or relax some of the views that Fed is going to loosen the policy anytime soon," said Bart Melek, head of commodity strategies at TD Securities in Toronto.

"We have economic numbers that are fairly well supported, equity markets are strong, gold doesn`t tend to perform particularly well in these situations as opportunity cost is associated with holding the zero-yielding asset."

ADP`s national employment data for April showed 275,000 new private-sector job additions, higher than consensus estimate of 180,000 additions.

Stocks around the world rose on Wednesday, extending the global equity market rally into a fifth month as Apple Inc`s stellar results and forecast allayed concerns about slowing growth in corporate profits.

"Gold is more focused on what equity markets are doing and if equities continue higher gold will trade lower despite a weaker dollar," said Bob Haberkorn, senior market strategist at RJO Futures.

The dollar index fell to its lowest in a week against key rivals, weakening for the fourth straight session, after as disappointing data on U.S. manufacturing activity and construction spending revived concerns about the economy.

Meanwhile, major U.S. indexes gained overnight, after U.S. President Donald Trump agreed with Democratic leaders to spend $2 trillion on infrastructure.

Among other metals, silver fell to more than four month low at $14.68 in the session, while platinum prices dropped 1 percent to $876.75, its lowest in nearly a month.

Palladium slipped more than 5 percent to $1,310.03 an ounce, the level last seen on Jan. 25.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)