Investing.com - Gold prices erased gains seen a day earlier when news that the Democrats had taken control of the House of Representatives, effectively creating a political gridlock in Congress, had dampened demand for the dollar and benefited the precious metal. As gold pulled back to Tuesday’s closing price, investors focused their attention on the upcoming monetary policy decision from the Federal Reserve.
At 9:13 AM ET (14:13 GMT), gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell $2.80, or 0.23%, to $1,223.40 a troy ounce.
Meanwhile, the?EUR?U.S. U.S. dollar index, which tracks the greenback against a basket of six major currencies, gained 0.20% to 96.
A stronger greenback makes the dollar-denominated precious metal more expensive for holders of foreign currencies.
The Fed is widely expected to hold rates steady at the current range of 2.0% to 2.25% when it announces its decision at 2:00 PM ET (19:00 GMT) Thursday, but investors will scrutinize the statement for any hints on how the Fed views inflation and the economy.
Investors are concerned that rising wages and increasing inflationary pressures will push the Fed to raise rates at a faster pace than expected and markets currently expect the next hike to come at the following meeting in December.
Higher U.S. interest rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding bullion.
In other metals trading, silver futures lost 0.98% at $14.385 a troy ounce by 9:15 AM ET (14:15 GMT).
Palladium futures slumped 1.65% to $1,102.20 an ounce, while sister metal platinum fell 0.75% at $872.20.
In base metals, copper traded down 1.47% to $2.712 a pound