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Gold remains relatively flat, ahead of FOMC statement release


on — were relatively flat ahead of the release of the Federal Open Market Committee's monetary policy statement on Wednesday, where the Federal Reserve could provide key hints on the timing of its first interest rate hike in nearly a decade.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a tight range between $1,090.10 and $1,098.90, before settling at 1,094.80 an ounce, down 1.90 or 0.17%. After a brief rally earlier this week when gold posted its strongest one-day move in more than a month, the precious metal has hardly fluctuated over the last three sessions. It was preceded by a 10-day rout, the longest in nearly two decades, as gold faced downward pressure from an imminent rate hike, the dramatic fall in Chinese equities and the temporary resolution of longstanding conflicts regarding the Greek Debt bailout and Iranian Nuclear deal.

Gold likely gained support at $1,090.10, the low from July 20 and was met with resistance at 1,105.80 the high from July 23. During last week's skid, gold touched down to its lowest level in five years.

Following the completion of its two-day FOMC meeting, the Federal Reserve could offer further clues on whether it will raise its benchmark Federal Funds Rate in September or if conditions in the economy will necessitate the U.S. central bank to delay lift-off. During testimony before Congress earlier this month, Fed chair Janet Yellen reiterated that conditions in the economy are likely to justify a rate hike at some point this year. Federal Reserve of St. Louis president James Bullard also bolstered hawkish arguments for lifting rates last week when he said there is a 50% chance lift-off will occur in September.

U.S. short term interest rates have remained level between zero and 0.25% for nearly six years since the end of the Financial Crisis. Nearly a decade has passed since the Federal Reserve last instituted a rate hike. Yellen has consistently downplayed the timing of the first rate hike over the last six months, arguing that the gradual path of rate increases carries more importance than initial lift-off.

Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in periods of rising interest rates.

The , which measures the strength of the greenback versus a basket of six other major currencies, surged to an intraday high of 97.02, before falling back slightly to 96.97 in afternoon trading – up 0.21% on the session.

Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

Silver for September delivery gained 0.123 or 0.84% to 14.765 an ounce.

Copper for September delivery rose 0.004 or 0.16% to 2.406 a pound.

In China, the rallied late to close up 3.4% at 3,789.17, halting a three-day skid. On Monday, Chinese stocks fell by more than 8% experiencing its largest one-day fall since 2007.

China is the world's largest consumer of and second-largest consumer of gold, behind India.

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