2019.06.1815:01:00UTC+00Gold Futures Pare Some Gains, But Still Settle At 14-month High

Gold prices moved higher on Tuesday, as the dollar remained somewhat sluggish ahead of the Federal Reserve's monetary policy announcement, due on Wednesday.

Although the Fed is likely to hold rates unchanged, the accompanying statement is expected to provide clues about the timing of future rate cuts.

The European Central Bank President Mario Draghi said earlier today that the central bank still has room to cut interest rates and measures to cushion the side effect from low interest rates.

Speaking at the ECB Forum on Central Banking in Sintra, Portugal, Draghi said, "Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools." "And the APP [asset purchase program] still has considerable headroom."

The dollar index was up marginally at 97.62, after having advanced to 97.77 earlier in the day.

Gold pared some gains on mild optimism about U.S.-China trade deal after U.S. President Donald Trump tweeted that he had a "very good" telephone conversation with Chinese Premier Xi Jinping.

Gold futures for August ended up $7.80, or 0.6%, at $1,350.70 an ounce, off the day's high of $1,358.50 an ounce, the highest level since mid April 2018.

On Monday, Gold futures for August ended down $1.60, or 0.1%, at $1,342.90 an ounce, snapping a four-day winning streak.

Silver futures for July ended up $0.164, at $14.993 an ounce, while Copper futures for July settled at $2.7030 per pound, gaining $0.0565 for the session.

The dollar shed some ground after a key indicator of the health of the U.S. manufacturing sector tanked in June, suggesting that business sentiment around new tariffs is starting to bit.

A report from the Commerce Department showed new residential construction in the U.S. unexpectedly decreased from an upwardly revised level in the month of May.

The report said housing starts slid by 0.9% to an annual rate of 1.269 million in May from an upwardly revised April estimate of 1.281 million.

Economists had expected housing starts to edge up to 1.239 million from the 1.235 million originally reported for April.