Investing.com - Gold prices briefly fell to the lowest levels of the session on Wednesday, after official data showed that the U.S. economy grew significantly more than expected in the second quarter.
Prices rebounded as investors awaited the conclusion of the Federal Open Market Committee meeting later in the session for further hints on the future course of U.S. monetary policy.
On the Comex division of the New York Mercantile Exchange, gold for June delivery fell to a daily low of $1,293.30 a troy ounce, the weakest level since July 25, before turning higher to last trade at $1,301.10 during U.S. morning hours, up 0.05%, or 60 cents.
Futures were likely to find support at $1,287.50, the low from July 24 and resistance at $1,320.40, the high from July 21.
Gold prices briefly fell to the lowest levels of the session after the Commerce Department said the U.S. economy grew at a seasonally adjusted annual rate of 4% in the second quarter, easily surpassing expectations for growth of 3%.
Personal consumption grew 2.5%, well above predictions of 1.9%, the report said, adding to the view that the economic recovery is gaining traction.
The robust data came after payroll processing firm ADP said U.S. non-farm private employment rose by a seasonally adjusted 218,000 in July, below expectations for an increase of 230,000. The economy created 281,000 jobs in June.
Market players now prepared for the outcome of the Federal Reserve’s policy meeting later in the day. The central bank is likely to stick to its timetable to taper its monthly bond purchases by another $10 billion to a total of $25 billion a month.
Earlier this month Fed Chair Janet Yellen said that rates could rise sooner if the recovery in the labor market continued.
Gold is seen as a less attractive alternative in times of higher interest rates, as it often costs money to hold and struggles to compete with yield-bearing investments.
Also on the Comex, silver for September delivery tacked on 0.48%, or 9.9 cents, to trade at $20.68 a troy ounce.
Elsewhere in metals trading, copper for September delivery advanced 0.57%, or 1.8 cents, to trade at $3.237 a pound.