Gold prices dropped on Wednesday as the dollar extended its uptick ahead of the Federal Reserve’s monetary policy announcement.<\/p>\n
The U.S. central bank is widely expected to leave interest rates unchanged. The focus is on the accompanying statement for clues about the outlook for rates.<\/p>\n
At the press conference following the rate decision, Chair Jerome Powell may reiterate that the Fed is ‘proceeding carefully’ and another rate hike is still an option based on incoming data.<\/p>\n
CME Group’s FedWatch Tool is currently indicating a 98.8% chance the Fed will leave rates unchanged today and a 74.6% chance rates will remain unchanged in December.<\/p>\n
The dollar index advanced to 107.09, gaining nearly 0.4%.<\/p>\n
Gold futures for December ended lower by $6.80 at $1,987.50 an ounce.<\/p>\n
Silver futures for December ended down $0.162 at $22.790 an ounce, while Copper futures for December settled at $3.6490, the previous closing level.<\/p>\n
In economic news, payroll processor ADP released a report before the start of trading showing private sector employment in the U.S. increased by less than expected in the month of October.<\/p>\n
The report said private sector employment climbed by 113,000 jobs in October after rising by 89,000 jobs in September. Economists had expected employment to jump by 150,000 jobs.<\/p>\n
A separate report released by the Institute for Supply Management showed manufacturing activity in the U.S. unexpectedly contracted at a faster rate in the month of October.<\/p>\n
The ISM said its manufacturing PMI fell to 46.7 in October from 49.0 in September, with a reading below 50 indicating a contraction. Economists had expected the index to come in unchanged compared to the previous month. <\/p>\n