(MENAFN- FxPro) Gold prices ticked lower ahead of the Federal Reserve's latest view on interst rates and an apparent stalemate in Greek debt talks.
In Europe, there were few developments in the Greek Debt negotiations ahead of Thursday's meeting of the euro zone finance ministers in Luxembourg. Greece is running out of time to strike a deal before the remainder of its ‚¬240 billion bailout expires on June 30.
On the Comex division of the New York Mercantile Exchange, gold for August delivery dipped 0.03% to $1,180.60 a troy ounce.
Silver for July delivery fell 0.01% to $15.948 a troy ounce.
Copper for July delivery eased 0.09% to $2.614 a pound.
Overnight, gold futures ticked down amid a stronger dollar, as investors await potential market-moving comments from Janet Yellen on the timing of an interest rate hike from the Federal Open Market Committee at the conclusion of its two-day June meeting on Wednesday.
While the Fed has indicated that it could raise interest rates following the end of Wednesday's meeting, it is more likely that the U.S. Central Bank will wait until September before lifting rates for the first time in nearly a decade.
The Fed would like to see significant improvements in wage and GDP growth, along with indications that inflation is moving toward its target goal of 2% before it raises its benchmark Fed Funds Rate above its current level of zero to 0.25%. Since its last meeting, the U.S. economy added 280,000 jobs in May while hourly wages rose by 0.3%. Retail sales, meanwhile, a closely watched metric, surged by 1.2% last month, fueled by increases in motor vehicle and gas sales.
Close observers of the Fed will likely focus intently on its Federal Funds Rate Target for clues on how gradually it plans to hike rates after initial liftoff. Previously, the Federal Reserve set a target of between 0.5% and 1.0% for December, which it expects will increase to 1.5 and 2.0% by December, 2016. A year later, the Fed projects its benchmark rate will exceed 3.0%.
Gold, which is not attached to dividends or interest rates, struggles to compete with high-yield bearing assets in periods of increasing rates.
When the Fed released the minutes from its April meeting last month, it expressed concern that interest rates could spike after initial lift-off, citing the possibility of an increased role in high frequency trading, decreases in inventories held by broker-dealers and the potential for higher assets in bond funds.
In a monthly report, the U.S. Department of Commerce said the number of building permits for future home construction surged nearly 12% to an eight-year high at 1.28 million units. Although monthly housing starts dipped 11.1% to 1.04 million units, the Commerce Department upwardly revised an already robust figure from April to 1.17 million units.
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