WASHINGTON (dpa-AFX) - Gold prices drifted lower on Wednesday, pushing the most active gold futures contract to a weak close ahead of the Federal Reserve's monetary policy announcement.
The Fed's policy announcement, due at 2 PM ET, is expected to provide insights about the outlook for rate hikes and the start of the balance sheet reduction.
Fed Chair Jerome Powell is due to begin a new conference about half an hour after the release of the policy statement. Markets have already priced in a 25 bps rate hike in March, and three more quarter-point increases by year-end.
The dollar index, which climbed to 96.20, pared some gains subsequently and was at 96.06 a little while ago, netting a gain of 0.12%.
Gold futures for February ended down by $22.80 or about 1.2% at $1,829.70 an ounce.
Silver futures for March ended lower by $0.089 at $23.807 an ounce, while Copper futures for March settled at $4.5150 per pound, up $0.0650 from the previous close.
On the U.S. economic front, a report released by the Commerce Department showed new home sales in the U.S. surged much more than expected to a nine-month high in the month of December.
The Commerce Department said new home sales soared by 11.9% to an annual rate of 811,000 in December after spiking by 11.7% to a revised rate of 725,000 in November.
Economists had expected new home sales to jump by 2.2% to a rate of 760,000 from the 744,000 originally reported for the previous month. With the much bigger than expected increase, new home sales reached their highest annual rate since hitting 873,000 last March.
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