Gold edges up after biggest plunge in over a year

Gold edged up Wednesday after witnessing its steepest retreat in more than a year in response to the dollars strength a day earlier. The metals moves, however, were subdued as investors awaited the release of Federal Reserve meeting minutes which is expected to provide another read on the mood at the central bank as it looks to continue to tighten the interest-rate crank this year.

The dollar index is now up for the fourth consecutive day. Barring a surprise selloff later on today in reaction to the FOMC minutes, the greenback could be on the verge of a more significant comeback, said Fawad Razaqzada, a market analyst at Thanks to a stronger economy, the Fed looks set to tighten its belt more aggressively this year. This should help push bond yields higher and support the dollar.

Gold typically moves inversely to a firmer dollar and rising Treasury yields.

April gold GCJ8, +0.06% added $1 to $1,332.20 an ounce. The contract gave up 1.9% Tuesday, recording its sharpest drop for a most actively traded futures contract since Dec. 14, 2016, when gold sank by 2.9% according to FactSet data. But the metal remains relatively volatile. Last week saw gold register its strongest weekly gain in more than a year, as it fed off the dollars slump.

Meanwhile, March silver SIH8, +0.99% rose 15 cents, or 1%, to $16.595 an ounce.

The popular exchange-traded SPDR Gold Shares GLD, -0.09% was flat and the silver-focused ETF, the iShares Silver Trust SLV, +0.83% rose 0.8%.

Precious metals lost ground as the dollar sprung higher following last weeks sharp decline. A weaker dollar can boost commodities priced in dollars, because it makes them cheaper to buy for holders of other currencies. The ICE Dollar Index DXY, +0.13% was up 0.7%.

The Fed minutes are scheduled for release at 2 p.m. Eastern against the backdrop of a healthy economy.

An index that tracks the U.S. manufacturing sector rose to a nearly 3 1/2-year high to 55.9 in February from 55.5, while the services barometer climbed to 55.9 from 53.3, according to IHS Markits flash PMI. Any number over 50 signifies expansion, and results above 55 are considered exceptional.

Meanwhile, existing-home sales reached a seasonally adjusted annual pace of 5.38 million in January as supply couldn’t keep up with demand, the National Association of Realtors said. Economists polled by MarketWatch expect 5.59 million homes were sold.

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In other metals trading, March copper HGH8, +0.81% lost 1 cent, or 0.4%, to $3.20 a pound.

April platinum PLJ8, -0.71% shed $1.90, or 0.2%, to $1,002.10 an ounce. March palladium PAH8, -0.59% dropped $2.80, or 0.3%, to $1,024.35 an ounce.

Related Topics Metals and Minerals Metal Exchange U.S. Stocks Markets Gold Silver Copper Quote References GCJ8 +0.80 +0.06% SIH8 +0.16 +0.99% GLD -0.11 -0.09% SLV +0.13 +0.83% DXY +0.11 +0.13% HGH8 +0.03 +0.81% PLJ8 -7.10 -0.71% PAH8 -6.05 -0.59% Show all references MarketWatch Partner Center Most Popular U.S. stocks rise as Wall Street awaits Fed minutes Ditch Walmart? Heres the big mistake investors are making