By Claudia Assis and Sara Sjolin, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures on Tuesday erased earlier gains, slipping well below $1,700 an ounce as U.S. retail sales data were upbeat and investors looked ahead to the outcome of a meeting of Federal Reserve policy makers.
Gold for April delivery GCJ2 -0.05% shed $12.30, or 0.7%, to $1,687.50 an ounce on the Comex division of the New York Mercantile Exchange. It traded as high as $1,706.20 an ounce earlier.
U.S. stocks opened higher, but crude-oil futures traded lower.
“Gold is continuing to perform more like a risky asset than a safe haven, and is moving in harmony with [other] commodities,” analysts at Commerzbank said in a note to clients Tuesday.
Gold has tread water this month, and Tuesday’s Fed meeting “is likely to give little new impetus to the gold price even if the key interest rate is kept at its currently very low level,” they added.
The metal closed 0.7% lower Monday, breaking a three-session winning streak. Read more on Monday's metals session.
Attention is focused on the outcome of a meeting of the Fed’s rate-setting Federal Open Market Committee, or FOMC, with investors alert for any change, however unlikely, in the central bank’s easing stance.
The committee is scheduled to release its statement on Tuesday and recent strength in U.S. economic data has diluted expectations of further quantitative easing measures.
“If there are no announced changes to the Fed program, then the Fed statement is unlikely to have any obvious implications for the U.S. dollar,” HSBC analyst James Steel said in a research note.
“This would also mean that the FOMC meeting is likely to have little effect on gold,” Steel added.
Meanwhile, the U.S. Commerce Department said February retail sales climbed 1.1%, with growth rates for January and December revised higher. Read more about retail sales.
Earlier Tuesday, a gauge of German investor sentiment, the ZEW index, jumped sharply in March to its highest level since June 2010. The sentiment indicator rose to 22.3 from 5.4 in February, well above economists’ expectations of a 10.0 reading.
The broader metals complex traded mostly lower, with copper the exception.
Silver for May delivery SIK2 +0.75% declined 5 cents, or 0.1%, to $33.38 an ounce.
April platinum PLJ2 +0.46% lost $1.20, or 0.1%, to $1,694.50 an ounce, while sister metal palladium for June delivery PAM2 -0.16% fell $2.55, or 0.4%, to $701.70 an ounce.
May copper HGK2 +1.60% gained 5 cents, or 1.2%, to $3.88 a pound. Goldman Sachs lifted its three-month copper forecast 5% to $8,400 a metric ton, based on expectations of moderate U.S. economic growth and monetary easing in China.
