Gold Futures Settle Sharply Lower Ahead Of Fed Policy Announcement

Gold futures settled notably lower on Wednesday, with traders awaiting the Federal Reserve’s monetary policy announcement.

Data showing a sharp jump in private sector employment in the month of October weighed on gold prices.

The Fed is widely expected to announce plans to begin gradually scaling back its $120 billion in monthly bond purchases by mid-November or December. The language of the accompanying statement is expected to provide clues about the outlook for interest rates.

Traders also awaited the post-meeting press conference by Fed Chair Jerome Powell.

Markets also looked ahead to the Bank of England’s policy announcement due on Thursday.

The dollar’s retreat from higher levels helped limit gold’s downside a bit. The dollar index, which advanced to 94.21 around mid-morning, dropped to 94.04 a little before noon, and is currently at 94.08.

Gold futures for December ended lower by $25.50 or about 1.4% at $1,763.90 an ounce.

Silver futures for December ended down by $0.276 at $23.231 an ounce, while Copper futures for December settled at $4.3210 per pound, down $0.0450 from the previous close.

A report from payroll processor ADP showed private sector employment in the U.S. increased by more than expected in the month of October.

ADP said private sector employment jumped by 571,000 jobs in October after surging by a revised 523,000 jobs in September.

Economists had expected private sector employment to climb by 400,000 jobs compared to the addition of 568,000 jobs originally reported for the previous month.

The U.S. jobs data for the month of October, including non-farm payrolls, will be released on Friday.

The Bank of England announces its policy decision on Thursday, with think-tanks divided on which way the rate decision would go.

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