MTECHTIPS;-Gold edges lower as Fed rate decision draws closer

MTECHTIPS;-Gold edges lower as Fed rate decision draws closer

MTECHTIPS- Gold prices traded lower on Wednesday, after the release of strong U.S. data sparked upside momentum in the dollar and capped gains in the precious metal. Gold for June delivery on the Comex division of the New York Mercantile Exchange shed $7.17, or 0.57%, to $1,249.89 a troy ounce by 12:42 EDT. Gold continued to trade close to three-week lows, after better than expected jobs and services sector growth data fuelled expectations that the Federal Reserve would hike interest rates in June. The Institute for Supply Management said its non-manufacturing purchasing managers’ index rose to 57.5 in April from 55.2 in March. The reading was above economists’ forecasts of 55.8. A report from ADP and Moody’s Analytics showed U.S. companies created 177,000 new positions for the month, slightly above expectations of 175,000. According to investing.com’s Fed rate monitor tool, about 60% of traders expect the Federal Reserve to hike interest rates in June. Meanwhile, focus shifted towards the Fed rate decision and statement, scheduled for release today at 14:00 EDT. Although the majority of market participants expect the Fed to leave rates unchanged, investors remained cautious of any change in tone from the Fed statement concerning future interest rate hikes. The Federal Reserve has previously indicated that three total rate hikes in 2017 would be appropriate, should economic data, mainly jobs and inflation, continue to show steady growth.
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