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Gold Lingers Below $1,700 Ahead Of FOMC

The price of gold was lingering below the $1,700-mark Tuesday morning as traders await cues from the FOMC meeting scheduled later today.

Gold for April delivery, the most actively traded contract, lost $5.50 to $1,694.30 an ounce. Yesterday, gold ended below the $1,700-mark after China reported its biggest monthly trade deficit in at least 22 years for February, fueling concerns of an economic slowdown.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,293.68 tons.

This morning, the U.S. dollar was hovering near a monthly high versus the euro and sterling, while ticking higher against the Swiss franc and advanced near a 11-month high versus the yen

In economic news, Germany's economic sentiment improved for the fourth straight month in March, confirming the positive outlook for business activity, the Mannheim-based Centre for European Economic Research (ZEW) said. The indicator of economic sentiment rose by 16.9 points to a level of 22.3 in March, the highest level since June 2010. Economists had expected the index to rise to 10. Meanwhile, economic expectations for the Euro zone increased by 19.1 to 11.0 points in March. The indicator for the current economic situation gained 0.7 points to minus 48.4 points.

Elsewhere, the prices of silver and platinum were ticking higher in morning deals.

From the U.S., the Commerce Department will come out with its retail sales report for February at 8:30 a.m. ET. Economists estimate a 1.2 percent increase in retail sales and a 0.8 percent increase in retail sales that exclude autos. In January, retail sales rose a less than expected 0.4 percent and sales, excluding autos, were up 0.7 percent.

The Federal Open Market Committee is scheduled to begin a 1-day meeting to discuss the near term direction of monetary policy. The monetary policy-setting arm of the Federal Reserve is set to release a post-meeting policy statement at 2:15 p.m. ET. Economists do not expect any material change in the central bank's stance.

by RTT Staff Writer

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