Gold falls in early Asia ahead of Fed meet with cautious tone seen

Investing.com - Gold prices eased in early Asia on Wednesday ahead of the latest U.S. Federal Reserve announcement on monetary policy with expectations for cautious language given recent mixed economic data.

On the Comex division of the New York Mercantile Exchange, gold for June delivery eased 0.17% to $1,211.80 a troy ounce.

Elsewhere, silver for July delivery eased 0.11% to $16.612 a troy ounce. Copper for July delivery dropped 0.13% to $2.786 a pound.

Overnight, gold futures moved higher amid a weaker dollar, as metal traders shifted their focus to the conclusion of the Federal Open Market Committee's two-day meeting on Wednesday when the Fed could offer hints on the timing of a highly-anticipated interest rate hike.

The U.S. dollar moved broadly lower as consumer confidence fell sharply for the month of April. The Conference Board in its monthly report said its Consumer Confidence Index fell more than 6 points in April from March's level of 101.3. The current reading of 95.2 is markedly lower than a consensus of 103.0 and low estimates of 100.5.

A more detailed reading showed an 8.5 point decline in its assessment of future conditions to 87.5, the lowest level since September. Inflation expectations also fell 0.4 for the month to 4.8%, reaching one of the lowest levels since the end of the Financial Crisis.

Gold becomes more expensive for foreign purchasers as the dollar appreciates.

The Fed is expected to keep its benchmark Federal Funds Rate at its current level of zero to 0.25% following the conclusion of the two-day Federal Open Market Committee (FOMC) meeting on Wednesday.

When the Fed released the minutes from its March meeting earlier this month, the committee ruled that an increase in the target range for the rate remained "unlikely at the April meeting."