Gold traded below a three-week high in New York before the U.S. Federal Reserve concludes a two-day policy meeting, while investors weighed tensions in Iraq and Ukraine.
Gold halted a 12-year rally in 2013 on speculation the Fed would reduce stimulus put in place to fuel growth. The Federal Open Market Committee cut asset purchases at each of the past four meetings as the economy improved, and may decide today to taper monthly bond buying by another $10 billion. The central bank will probably raise its benchmark interest rate faster than money-market investors forecast, a Bloomberg survey showed.
“We remain cautious about gold going into the Fed meeting,” Edward Meir, an analyst at INTL FCStone in New York, wrote in an e-mailed note. “Hints of rate rises could trigger more dollar strengthening and prove to be an overall drag on the precious metals group. Geopolitical headlines still have the capability to spark prices higher, but for the moment, we think Fed uncertainties will dominate.”
Gold for August delivery declined less than 0.1 percent to $1,271.30 an ounce at 7:43 a.m. on the Comex in New York. Prices yesterday fell for the first time in seven days to snap the longest rally since February. Bullion touched $1,285.10 on June 16, the highest since May 27, as escalating violence in Iraq and worsening relations between Ukraine and Russia spurred demand for a haven.
via Bloomberg 
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