Gold traded in a tight range on Wednesday as investors awaited the outcome of a U.S. Federal Reserve meeting for clues on possible tapering of economic support measures, while a firmer dollar weighed on the metal.
Spot gold was steady at $1,859.90 per ounce by 0657 GMT. It fell to its lowest since May 17 at $1,843.99 on Monday.
“Gold has been down for a few days and this reflects in the building anticipation that (the Fed’s) tapering of QE might start faster than the market is currently expecting,” DailyFX currency strategist Ilya Spivak said.
“Gold has entered the next leg down. Immediate support at this stage is around $1,850. If we can break that with the help of the (Fed meet) over the next 24 hours, gold might head towards $1,800.”
Making gold more expensive for holders of other currencies, the dollar held steady near a one-month high against its rivals.
Data on Tuesday showed U.S. retail sales dropped more than expected in May, while producer prices jumped by 6.6% year-over-year during the month, the largest gain since November 2010.
