Investing.com - Gold prices were flat in Asia on Wednesday as investors held steady ahead of the May 1 holidays in much of the region with major buyer China on the sidelines on Thursday and Friday.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at $1,296.20a troy ounce, down 0.01%, after hitting an overnight session low of $1,286.60 and off a high of $1,301.40.
Overnight, gold prices inched lower as investors shrugged off lackluster U.S. data and remained camped out in safe-haven dollar positions ahead of the Federal Reserve''s Wednesday statement on monetary policy.
The dollar brushed off a lackluster report on consumer confidence and firmed on Tuesday, which gave gold room to soften, as the two assets tend to trade inversely with one another.
The Conference Board, a market research group, said its consumer confidence index declined to 82.3 in April from a 83.9 in March, whose figure was revised up from a previously reported 82.3.
Analysts had expected the index to inch down to 83.0 in April.
The Present Situation Index decreased to 78.3 from 82.5, while the Expectations Index was virtually unchanged at 84.9 versus 84.8 in March.
“Consumer confidence declined slightly in April, as consumers assessed current business and labor market conditions less favorably than in March,” Lynn Franco, Director of Economic Indicators at The Conference Board, said in a statement.
“However, their expectations regarding the short-term outlook for the economy and labor market held steady. Thus, while sentiment regarding current conditions may have slipped a bit, consumers do not foresee the economy, or the labor market, losing the momentum that has been building up over the past several months.”
The data was not weak enough to sway investor expectations that the Federal Reserve will continue tapering monthly bond purchases as the year unfolds.
Fed bond purchases, currently set at $55 billion a month, weaken the dollar by suppressing long-term borrowing costs, making gold an attractive hedge.
Talk of Fed tapering tends to strengthen the greenback and soften gold prices.
Silver for July delivery fell 0.22% at US$19.495 a troy ounce, while copper futures for July delivery rose 0.07% to US$3.077 a pound.