Gold futures rose for the first time in three days as the dollar’s drop boosted demand for the metal as an alternative investment before the latest signals from the Federal Reserve on U.S. monetary stimulus.
The greenback weakened for the third straight day against the euro. Fed policy makers conclude a two-day meeting today. The central bank buys $85 billion a month of Treasury and mortgage debt. Chairman Ben S. Bernanke said in May that the pace of monthly purchases may be scaled back if the employment outlook shows sustained improvement.
“The dollar is a little weak,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “The market is in a wait-and-watch mode until the Fed statement” this afternoon, he said.
Gold futures for August delivery climbed 0.5 percent to settle at $1,374 an ounce at 1:44 p.m. on the Comex in New York. Trading was 62 percent below the average in the past 100 days for this time, according to data compiled by Bloomberg. Yesterday, the price touched $1,360.20, the lowest for a most-active contract since May 23.
Futures have dropped 18 percent this year following 12 straight annual gains. Some investors lost faith in the metal as a store of value amid a recovery in the U.S. economy, a rally in equities and low inflation.
Yesterday, holdings in exchange-traded products backed by gold fell 1.6 metric tons to 2,114.6 tons, the lowest since March 2011, according to Bloomberg data. The assets have dropped 20 percent in 2013 after climbing every year since the first product was listed in 2003.
Silver futures for July delivery dropped 0.2 percent to $21.623 an ounce on the Comex.
On the New York Mercantile Exchange, palladium futures for September delivery slumped 1.7 percent to $696.40 an ounce. Earlier, the prices touched $694.90, the lowest since May 9.
Platinum futures for July delivery dropped 1.1 percent to $1,423.90 an ounce.