Chicago, April 26 (IANS) Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday ahead of the US Federal Reserve’s April Federal Open Market Committee (FOMC) meeting.
The most active gold contract for June delivery rose $10.2, or 0.83 percent, to settle at $1,240.20 per ounce, Xinhua news agency reported.
Traders are hedging their bets as the US central bank prepared to enter its scheduled April FOMC meeting.
Analysts believe it is unlikely that the Fed will raise rates during this meeting, but said the Fed will provide more hints to investors on the timing of a rate hike.
After March’s FOMC meeting, traders believe the Fed may raise rates from 0.50 to 0.75 during the July FOMC meeting.
According to the CMEGroup’s Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 23 percent at the June 2016 meeting, and 37 percent at the July 2016 meeting.
Gold was given further support as the US Dollar Index fell by 0.32 percent to 94.73. The index is a measure of the dollar against a basket of major currencies.
Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.
The precious metal was given additional support as a report released by the US Department of Commerce showed new home sales falling by 1,000 to a 511,000 level during the month of March, which was worse-than-expected.
However, analysts note that there was a 7,000 upward revision to 519,000 for the month of February, which analysts note was far better-than-expected, and may have tempered the bad news from March.
Traders are expecting the durable goods orders report to be released on Tuesday, the international trade in goods and FOMC meeting announcement on Wednesday, gross domestic product report on Thursday, and personal income and outlays on Friday.
Silver for May delivery added 10.9 cents, or 0.64 percent, to close at $17.009 per ounce.
Platinum for July delivery rose $7.3, or 0.72 percent, to close at $1,018.50 per ounce.