Gold futures were on track to post a back to back loss on Wednesday as traders awaited the outcome of a Federal Reserve policy meeting and Treasury yields saw a renewed rise.
U.S. 10year yields are headed higher, with the 10year Treasury note climbing back above 1.62 ahead of the Federal Open Market committee decision.
The Federal Reserve and its chairman, Jerome Powell, are expected to maintain that theres no rush to begin thinking about raising interest rates or tapering the central banks bondbuying program. The Fed is scheduled to release a statement at 2 p.m. Eastern, with Powells news conference set for 230 p.m.
A sufficiently dovish Fed and a sufficiently convincing accompanying statement could easily reverse the positive pressure on U.S. yields, and result in a softer U.S. dollar against some major peers and gold, said Ipek Ozkardeskaya, senior analyst at Swissquote, in market commentary.
Higher yields can be a drag on gold and other commodities because it raises the opportunity cost of holding assets that dont offer a yield. A stronger dollar can be a negative because it makes commodities priced in the currency more expensive to users of other currencies.
Recent softness for gold has mirrored a rise in the yield as well as a recent strengthening of the dollar, said Carlo Alberto De Casa, chief analyst at ActivTrades, in a note.
In Wednesday dealings, gold for June delivery fell 7.80, or 0.4, to 1,771 an ounce on Comex, following a loss of nearly 0.1…