US gold futures dropped for a second straight session Wednesday, hurt by a stronger dollar, crude oil slippage and a drop in gold exchange-traded fund holdings ahead of an interest rate decision by the Federal Reserve. June gold contract on Comex division of New York Mercantile Exchange down $7.80 at $869 an ounce at 10:59 am EDT (1459 GMT).
Ranged $878.40 to $864.10 which marked a three-month bottom. Gold held in StreetTRACKS Gold Shares, the world's largest gold-backed exchange-traded fund, dropped to 580.45 tonnes as of Tuesday, shedding nearly 10 percent of its holdings in the last 10 days, taking a toll on sentiment. Decline in open interest, increasing delivery notices and chart-based selling cited.
Investors moved to the sidelines ahead of the Federal Reserve Open Market Committee (FOMC) meeting, which will render an interest rate decision Wednesday afternoon. Improved sentiment in the dollar will pressure gold, which could testing down towards the important $850 level.
Comex estimated 10:00 am volume at 72,871 lots. Spot gold was quoted at $866.70/867.90 compared with $873.55/874.75 at the close Tuesday. July platinum was down $20.10 or 1 percent at $1,920 an ounce. Spot traded at $1,906/1,921.
June palladium was down $15.30 or 3.5 percent at $416.35 an ounce. Spot was at $410.50/418.50. May silver was up 6.5 cents at $16.605 an ounce, ranging from $16.765 to $16.365 which was near a three-month low. Spot silver was at $16.60/16.65 against Tuesday's late quote of $16.51/16.59.
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