Tuesday, 19 June 2012 17:17

Gold Ends Lower Ahead Of Fed Policy Meet

Written by  RTT

(RTTNews) - Gold futures pared early gains to settle lower Tuesday, losing some of its shine ahead of the two-day Federal Open Market Committee meeting. The Federal Reserve's two-day policy meet began today, with investors anticipating further quantitative easing to be forthcoming. Gold prices were impacted by some positive gains in the Spanish bond auctions, shedding some of the precious metal's safe haven status.

Spain's 10-year benchmark yield remained above 7 percent on Tuesday, a level considered unsustainable, having touched an euro-era record of 7.1 percent yesterday. Nonetheless, the Spanish treasury raised 3.04 billion euros from sale of its 12- and 18-month bills, slightly higher than the 3 billion euros maximum sale target.

Gold for August delivery, the most actively traded contract, dropped $3.80 or 0.2 percent to close at $1,623.20 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.

Gold traded at an intraday high of $1,634.30 an ounce and a low of $1,618.10 an ounce.

Gold ended a shade lower yesterday on fading hopes of monetary stimulus after the Greek election outcome and bond auctions in Spain and Italy where yields soared to record levels, dragging prices marginally down for the first time in seven days.

The dollar index, which tracks the U.S. unit against six major currencies, was trading at 81.375 on Tuesday, up from 82.002 in North American trade late Monday. The dollar scaled a high of 81.99 intraday and a low of 81.29.