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Gold prices down in Asia as investors unsure on Fed timing

Published 03/22/2015, 11:26 PM
Updated 03/22/2015, 11:28 PM
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Investing.com - Gold prices eased in Asia on Monday in light trade as sentiment on the timing of a widely expected Federal Reserve rate hike guides investors.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery fell 0.24% to 1,181.70 a troy ounce.

Elsewhere on the Comex, silver futures for May delivery slumped 1.32% to $16.660 a troy ounce.

Also in metals trading, copper for May delivery rose 0.61% to $2.770 a pound.

Last week, gold rallied to a two-week high on Friday, as the U.S. dollar sold off after the Federal Reserve projected a slower pace of rate hikes following its policy meeting earlier in the week.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

The dollar's losses came after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections, prompting investors to push back expectations on the timing and pace of future rate increases.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.

In the week ahead, investors will be focusing on Tuesday’s U.S. inflation report after Fed Chair Janet Yellen warned last week that the stronger dollar was pushing down consumer prices.

On Monday, the U.S. is to release a report on existing home sales.

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