US gold futures finished down but well off their session low on Wednesday on liquidation by funds and weak copper prices, as investors were largely on the sidelines because the pit session ended before the Federal Reserve's decision on interest rates.
Most active gold for June delivery on the Comex division of the New York Mercantile Exchange settled down $4.90 at $682.50 an ounce traded from $677.50 to $688.90. "I think it's just some fund liquidation going on before the Fed decision," said one New York precious metal dealer.
After the close of Wednesday's open-outcry session, the United States Federal Reserve held benchmark interest rates steady at 5.25 percent for a seventh straight meeting and again said its main worry is that inflation will fail to moderate. Gold is usually seen as a hedge against inflation.
Joseph Gizzards at Saibu Commodities said from the Comex floor that lower copper futures pushed gold and silver prices lower. "The funds are a little bit long. It's almost time to start liquidating some of these (precious) metals," he said. United Ststes copper futures closed down more than 1 percent on Wednesday.
Gizzards said that most of the investors on Wednesday had been on the sidelines as they were looking for trading cues from the Fed meeting. Along with the Fed, the European Central Bank and Bank of England were also setting rates this week. Comex estimated volume at 1 pm at 69,337 lots and options turnover at 9,349.
Turnover in the Chicago Board of Trade's electronically traded 100-oz gold contract was 31,137 lots as of 2:01 pm. New York Mercantile Exchange Inc, a unit of Nymex Holdings Inc, said on Wednesday it will offer options trading for gold, silver, crude oil and natural gas on the CME Globes electronic trading platform beginning on June 24 for trade date June 25.
Spot gold was quoted at $679.50/0.00 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 closed down 13.0 cents at $13.470 an ounce, traded from $13.285 to $13.620.
Spot silver was quoted at $13.35/3.38, versus $13.48/3.51, its finish late on Tuesday in New York. The silver fix was set at $13.45 an ounce in London. July platinum fell $3.70 to end at $1,339.50 an ounce. Spot platinum fetched $1,324.00/1,329.00. June palladium ended down $5.55 at $370.40 an ounce. Spot palladium was quoted at $368.00/372.00.