Gold Ends Below $1,300 Ahead Of Fed Policy Statement

(RTTNews) - Gold futures ended lower on Tuesday, as investors remained focused on the U.S. Federal Reserve's monetary policy announcement, due Wednesday.

The Fed is widely expected to slash its asset purchases by another $10 billion, cutting the size of the program down to $25 billion per month.

Although the interest rate decision is a foregone conclusion, markets will be paying close attention for clues if the Fed will tighten sooner than expected.

Fed Chairman Janet hinted as much when meeting with Congress earlier in the month, but so far the Fed's official statement has refrained from pushing up the timeline on rate hikes despite an improving economy.

The Fed highlights a hectic week on the economic front, as traders will also be treated to the U.S. jobs report for July and second quarter GDP data along with a flurry of other releases.

Gold for August delivery, the most actively traded contract, shed $5.0 or 0.4 percent to close at $1,298.30 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for August delivery scaled an intraday high of $1,312.10 and a low of $1,295.50 an ounce.

On Monday, gold futures ended flat, with focus on the U.S. Federal Reserve's monetary policy announcement later in the week, with continued concerns over the geopolitical tensions in Libya, Ukraine and Gaza.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 801.84 from its previous close on Tuesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.20 on Tuesday, up from its previous close of 81.01 late Monday in North American trade. The dollar scaled a high of 81.25 intraday and a low of 80.99.

The euro traded lower against the dollar at $1.3411 on Tuesday, as compared to its previous close of $1.3439 late Monday in North American trade. The euro scaled a high of $1.3444 intraday and a low of $1.3406.

In economic news from the U.S., the Conference Board said its consumer confidence index surged up to 90.9 in July from an upwardly revised 86.4 in June, reaching its highest level since hitting 95.2 in October 2007.

Economists had been expecting the index to inch up to a reading of 85.4 from the 85.2 originally reported for the previous month.

Meanwhile, home prices in major U.S. metropolitan areas continued to increase at a slower pace in May, Standard & Poor's report showed. The S&P/Case-Shiller 20-City Composite Home Price Index increased at an annual rate of 9.3 percent in May compared to the 10.8 percent growth reported for April. Economists expected a more modest slowdown to an annual rate of 9.9 percent.