A day after recording their biggest single-session drop in two months, gold futures recovered to close modestly higher on Tuesday as the dollar turned weak ahead of the Federal Reserve's policy announcement, due on Wednesday.
The yield on U.S. 10-year Treasury note, which briefly rose to 3% on Tuesday, eased a bit today.
The dollar index, which dropped to 103.02 in early New York session, recovered to 103.50 subsequently, but still remained in negative territory, losing about 0.25%.
The Fed is widely expected to hike interest rates by a half-a-percentage point when it hands down its policy decision on Wednesday - the first such increase in about 20 years.
There is potential for the U.S. central bank to adopt an even more hawkish tone than many expect. As inflation worries mount, some investors are watching for the possibility of a 75 basis point hike, or a faster pace of balance sheet reduction.
Gold futures for June ended higher by $7.00 or about 0.4% at $1,870.60 an ounce, after plunging by about 2.5% on Monday.
Silver futures for July ended up by $0.081 at $22.665 an ounce, while Copper futures for July settled at $4.2830 per pound, gaining $0.0150.
The Bank of England is scheduled to announce its rate decision on Thursday. The BoE is expected to raise interest rates to their highest level since 2009.
Earlier today, Australia's central bank raised its key interest rate for the first time in over 11 years and signaled more tightening measures, saying that now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic.
In U.S. economic news today, new orders for U.S. manufactured goods spiked by more than expected in the month of March, according to a report released by the Commerce Department.
The report showed factory orders surged by 2.2% in March following a revised 0.1% uptick in February. Economists had expected factory orders to jump by 1.1% compared to the 0.5% drop originally reported for the previous month.
