• Gold prices on Wednesday were near a three-week low hit in the previous session as investors sought higher returns from riskier assets and the dollar firmed as markets waited for cues that the United States may raise interest rates.
Expectations that the Fed will signal a June rate increase later in the session lifted the dollar.
Spot gold was down 80 cents at $1,256 per ounce, as of 0327 GMT. Bullion on Tuesday hit $1,251.37 per ounce, its lowest since April 10.
• The dollar was steady at 111.97 yen early on Wednesday, after touching a six-week high in the previous session.
• The U.S. Federal Reserve concludes its two-day meeting later on Wednesday and is largely expected to hold interest rates steady. The focus will instead be on language about future increase.
• "The Fed meeting is the next likely catalyst for gold. There is a good chance that gold will stay range-bound around $1,245-$1,265 for sometime unless the markets take a major lead out of the meeting," said Jordan Eliseo, Chief Economist with ABC Bullion, Australia.
"Global tensions regarding North Korea has dissipated a bit and that's why we have seen a pull back in prices, which has been a healthy one as the markets looked a bit over extended," Eliseo said.
• Spot gold may retest a support at $1,249 per ounce, with a good chance of breaking below this level and falling to the next support at $1,228, according to Reuters technical analyst Wang Tao.
• "If the Fed mirrors the stance of what other central banks have been doing over the past week and tacks to a more accommodative stance, we could see gold experience something of a bounce," INTL FCStone analyst Edward Meir said.
• Silver edged up 0.4 percent to $16.87 per ounce, after hitting a three-month low at $16.75 in the previous session.
Reference: Reuters
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