Gold traded near a three-month low as investors weighed the outlook for higher U.S. interest rates before the Federal Reserve concludes a two-day meeting and assets in funds backed by the precious metal dropped.
Bullion for immediate delivery traded at $1,148.99 an ounce by 2:24 p.m. in Singapore from $1,149.57 on Tuesday, according to Bloomberg generic pricing. The price fell to $1,142.92 on March 17, the lowest level since Dec. 1.
Central to the debate at the Fed’s meeting will be whether the economy has gained enough steam to warrant removing a pledge to be “patient” on raising borrowing costs. Almost 90 percent of economists surveyed by Bloomberg predict officials will drop the pledge from a policy statement due at the conclusion of their gathering on Wednesday. Holdings in bullion-backed exchange-traded products fell for a 15th straight day on Tuesday, the longest run in more than a year.
“Investors exited gold ETPs ahead of the FOMC meeting,” analysts from Australia & New Zealand Banking Group Ltd. wrote in an e-mailed note. Prices fell “on speculation of a sooner-than-expected U.S. interest rate rise,” they said.
Assets in gold ETPs declined to 1,635.8 metric tons on Tuesday, the lowest since Jan. 20, according to data compiled by Bloomberg. Money managers have cut their net-long wagers on gold for six straight weeks, U.S. government data show.
Gold for April delivery was little changed at $1,147.90 an ounce on the Comex. The most-active contract dropped to $1,141.60 on Tuesday, the lowest since Nov. 7, when the metal reached a four-year low of $1,130.40.
Silver for immediate delivery fell 0.2 percent to $15.538 an ounce. Platinum lost 0.2 percent to $1,093.75 an ounce after slumping to $1,089.43 on Tuesday, the lowest since 2009. Palladium declined 0.3 percent to $761.13 an ounce.