US gold futures fell in quiet trading early on Wednesday on profit taking and weaker copper prices as investors were largely on the sidelines ahead of Federal Reserve's afternoon decision on interest rates.
At 10:26 am EDT (1426 GMT), most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange was down $1 at $686.40 an ounce, trading in tight $4 range from $684.30 to $688.90.
Joseph Guzzardi at Sabin Commodities said from the COMEX floor that lower copper futures pushed gold and silver prices lower. He added that some investors opted to lock in profits.
"Most of us have been on the sidelines, looking for the Fed meeting later on this afternoon to see what they are going to say," Guzzardi said. "The funds are a little bit long. It's almost time to start liquidating some of these (precious) metals," he said.
The Fed was widely expected to keep rates unchanged at 5.25 percent on Wednesday but investors would look to its accompanying policy statement to see if the emphasis has shifted from controlling inflation to acknowledging signs of weaker economic indicators.
Along with the Fed, the European Central Bank and Bank of England were also setting rates this week. Leonard Kaplan, president at Prospector Asset Management, said he did not expect gold prices to move sharply before the Fed's announcement, which was due after the end of Wednesday's pit session. "It's another quiet day. Everybody's waiting," Kaplan said.
Investors would take their cues from the rate-setting decisions, which often affect gold prices because of interactions in the currency markets. Spot gold was quoted at $683.50/4.00 an ounce, below a late quote of $684.30/5.80 in New York on Tuesday. The London afternoon gold fix was set at $683.00 an ounce.
COMEX July silver was down 10.0 cents at $13.500 an ounce, trading from $13.430 to $13.620. Spot silver was quoted at $13.37/3.42, versus $13.48/3.51, its finish late Tuesday in New York. The silver fix was set at $13.45 an ounce in London. July platinum fell $6.20 to $1,337 an ounce. Spot platinum fetched $1,324.00/1,329.00. June palladium dropped $3.55 to $372.40 an ounce. Spot palladium was quoted at $368.50/372.50.
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