Gold Ends Lower Ahead Of Fed Meet Outcome

(RTTNews) - Gold futures ended lower on Tuesday, as investors remained focused on the outcome of the most closely watched Federal Reserve meeting in months, which will also decide the direction the precious metal will take.

The Fed's two-day meet in Washington began this morning, with the central bank set to announce its policy decision Wednesday afternoon.

It is widely expected the central bank will withdraw its pledge to remain "patient" on raising interest rates in light of improvements in the broader U.S. economy. The market expects the Fed would hike interest rates either in June or August.

With a rate hike not far off and the dollar fluctuating, gold has slipped to its lowest since last November.

In some soft economic news, new residential construction in the U.S. showed a substantial decrease in February, with housing starts at their lowest in over a year.

Gold for April delivery, the most actively traded contract, dropped $5.00 or 0.4 percent to settle at $1,148.20 an ounce, on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for April delivery scaled an intraday high of $1,159.30 and a low of $1,141.60 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 750.67 tons on Tuesday, from its previous close of 750.95 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 99.62 on Tuesday, down from its previous close of 99.70 on Monday in late North American trade. The dollar scaled a high of 99.83 intraday and a low of 99.23.

The euro trended higher against the dollar at $1.0594 on Tuesday, as compared to its previous close of $1.0570 in North American trade late Monday. The euro scaled a high of $1.0651 intraday and a low of $1.0552.

In economic news, new residential construction in the U.S. showed a substantial decrease in February, a report from the Commerce Department on Tuesday. Housing starts plummeted by 17.0 percent to an annual rate of 897,000 in February from the revised January estimate of 1.081 million. Economists expected housing starts to dip to 1.048 million from the 1.065 million originally reported for the previous month.

Meanwhile, the Commerce Department said building permits climbed 3.0 percent to an annual rate of 1.092 million in February from the revised January rate of 1.060 million. Building permits, an indicator of future housing demand, had been expected to inch up to 1.058 million from the 1.053 million originally reported for January.

Eurozone employment grew at a slower pace at the end of 2014, data from Eurostat showed Tuesday. Employment rose 0.1 percent in the fourth quarter from a quarter ago, which was slower than the 0.2 percent rise in the third quarter and 0.3 percent in the second quarter.

Eurozone consumer prices remained negative for the third month in February as initially estimated, final report from Eurostat showed Tuesday. The harmonized index of consumer prices fell 0.3 percent in February from last year, slower than January's 0.6 percent decline. The annual decrease came in line with the flash estimate published on March 2.

German investor sentiment strengthened for the fifth consecutive month in March to its highest level in a year, a closely watched survey revealed Tuesday. Nonetheless, the improvement was weaker than expected, suggesting that concerns over the Greek crisis impacted optimism.

The economic sentiment indicator climbed to 54.8 from 53 in February, survey data from the Centre for European Economic Research, or ZEW, showed Tuesday. It was the highest value of the index since February 2014. Economists had expected a higher score of 59.4.

The leading economic index in the UK, which measures the future economic activity, increased at the start of the year, figures from the Conference Board showed Monday. The Conference Board leading economic index rose 0.2 percent in January, after staying flat in the previous month. In November, the index had dropped 0.4 percent.