Gold Ends Lower Ahead Of Fed Minutes

(RTTNews) - Gold futures ended lower for a second straight day Wednesday, ahead of the U.S. Federal Reserve policy meet minutes due later today, with investors anticipating a cut to the Fed's quantitative easing program. Nonetheless, some downbeat housing start data from the U.S. saw the precious metal pulling back most of its losses.

Housing starts in the U.S. rose less than anticipated in August, with building permits also registering an unexpected drop, a report from the Commerce Department showed Wednesday.

In a bid to limit gold consumption, import duty on gold jewelry was increased to 15 percent in India, the world's largest consumer of the precious metal. The move is seen as an effort by the government to protect the local jewelry industry, rather than to limit the country's current account deficit and falling rupee.

Gold for December delivery, the most actively traded contract, slipped $1.80 or 0.1 percent to close at $1,307.60 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,313.40 and a low of $1,291.50 an ounce.

Yesterday, gold ended lower ahead of the two-day Federal Reserve policy meet, with investor anticipating the Fed to announce plans to scale down its monthly $85 billion bond-buying program.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were at 911.12 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.02 on Wednesday, down from 81.15 late Tuesday in North American trade. The dollar scaled a high of 81.23 intraday and a low of 80.98.

The euro traded higher against the dollar at $1.3373 on Wednesday, as compared to its previous close of $1.3359 late Tuesday in North America. The euro scaled a high of $1.3382 intraday and a low of $1.3340.

In economic news, housing starts in the U.S. rose 0.9 percent to an annual rate of 891,000 in August from the downwardly revised July estimate of 883,000. Economists expected housing starts to climb to 915,000 from the 896,000 originally reported for the previous month. Meanwhile, building permits, an indicator of future housing demand, tumbled 3.8 percent to 918,000 in August from the upwardly revised July rate of 954,000. Economists expected permits at 950,000 from the 943,000 originally reported for July.

Bank of England policymakers unanimously decided to maintain quantitative easing unchanged earlier this month, as economic recovery gains steam even in the absence of additional stimulus. All the nine members of the Monetary Policy Committee led by Governor Mark Carney voted to retain the size of asset purchase program at GBP 375 billion on a consensus that more stimulus was inappropriate.