Gold Ends Higher Ahead Of Fed Policy Meet Outcome

(RTTNews) - Gold futures settled marginally higher on Tuesday, mostly as physical demand for the precious metal picked up in Asia, after having plummeted yesterday over concerns the Federal Reserve would begin tapering its $85 billion quantitative easing program sooner than later.

Fed members Charles Plosser and William Dudley had yesterday called for an earlier tapering of the quantitative easing program as the U.S. economy showed signs of definite improvement.

Meanwhile, investors await the outcome of the two-day Federal Reserve policy review meet on Wednesday, when the fate of Fed's monetary easing policy would be known.

Gold for December delivery, the most actively traded contract, gained $1.20 or 0.1 percent to close at $1,273.50 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,278.20 and a low of $1,268.00 an ounce.

Yesterday, gold lost about 1.2 percent as investors turned to riskier equity assets, as the precious metal came under pressure amid concerns the Federal Reserve would begin tapering its $85 billion quantitative easing program sooner than later.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 864.51 tons from 865.71 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.67 on Tuesday, down from 80.74 late Monday in North American trade. The dollar scaled a high of 80.84 intraday and a low of 80.56.

The euro traded higher against the dollar at $1.3537 on Tuesday, as compared to its previous close of $1.3506 late Monday in North America. The euro scaled a high of $1.3546 intraday and a low of $1.3488.

In economic news from the U.S., the Labor Department said its employment cost index rose by 0.4 percent in the third quarter following a 0.5 percent increase in the second quarter. Economists had expected the index to rise by another 0.5 percent. Wages and salaries increased by 0.3 percent in the third quarter after rising by 0.4 percent in the second quarter, while benefits rose by 0.7 percent compared to a 0.4 percent increase in the previous quarter.

From the eurozone, Germany's economic sentiment rose more-than-expected in November to its highest level in four years, a survey by the Centre for European Economic Research/ZEW showed. The ZEW Indicator of Economic Sentiment for Germany rose to 54.6 from 52.8 in October. Economists forecast a score of 54. The latest reading is the highest since October 2009.

Elsewhere, the Organization for Economic Co-operation and Development downgraded its global growth projections citing worsening outlook for some emerging economies. The world economy will grow 2.7 percent this year, down from 3.1 percent projected in May. In 2014, growth is forecast to rise to 3.6 percent and then to 3.9 percent in 2015. The estimate for 2014 was lowered from 4 percent.