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CHICAGO, March 14 (Xinhua) -- Gold futures on the COMEX division of the New York Mercantile Exchange slipped on Tuesday, one day ahead of the Federal Reserve's decision on interest rates.
The most active gold contract for April delivery fell 0.5 U.S. dollars, or 0.04 percent, to settle at 1,202.60 dollars per ounce.
Traders are almost entirely focused on the Federal Open Market Committee (FOMC) meeting which began on Tuesday. Analysts believe the Fed may raise rates from 0.75 to 1.00 during its two-day discussions.
According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 93 percent at the March meeting and 88 percent for the May meeting, along with a 6 percent chance of an increase to a 1.0 rate.
A report released by the U.S. Department of Labor on Tuesday put pressure on the precious metal as the PPI-FD increased by 0.3 percent, a figure which was higher-than-expected, along with year-on-year producer prices increasing by 2.2 percent which is slightly above the Fed's target inflation rate of 2 percent.
Analysts note that the U.S. Federal Reserve is likely watching this measure as they mulls over interest rates.
Gold was put under further pressure as the U.S. Dollar Index rose by 0.2 percent to 101.57 as of 1750 GMT. When dollar goes up, gold futures will fall.
However, the precious metal's fall was dampened as the U.S. Dow Jones Industrial Average fell by 50 points, or 0.25 percent as of 17:50 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven.
Traders are waiting for Wednesday, when the FOMC announces its decision on interest rates.
Silver for May delivery fell 4.9 cents, or 0.29 percent, to close at 16.923 dollars per ounce. Platinum for April delivery dropped 2.3 dollars, or 0.24 percent, to close at 938.90 dollars per ounce.
