Gold prices dip in Asia despite Fed vagueness on rate hike timing

Gold prices eased in early Asia on Thursday even as the U.S. Federal Reserve vaguely hinted that a widely expected rate hike this year won't happen in June.

The Federal Reserve, as expected kept interest rates at its current level following the conclusion of its Federal Open Market Committee meeting on Wednesday, but offered little clear language on the timing of its first rate hike in nearly a decade.

On the Comex division of the New York Mercantile Exchange, gold for June delivery fell 0.40% to $1,205.10 a troy ounce.

Elsewhere, silver for July delivery eased 0.69% to $16.587 a troy ounce. Copper for July delivery was flat at $2.793 a pound.

Overnight, gold futures fell back slightly on Wednesday ahead of a rate statement by the Federal Reserve, as worse than expected GDP data caused the dollar to fall sharply.

Gold reached a session-high of $1,213.50 a troy ounce in European afternoon trading, ahead of the U.S. Department of Commerce's release of Gross Domestic Product (GDP) growth for the first quarter of 2015. While analysts anticipated a slow period of growth for the first three months of the year, the figures released on Wednesday were even softer than expected.

U.S. GDP for the first quarter grew at 0.2%, far below expectations for growth of 1%. The figures were in line with forecasts by the Federal Reserve of Atlanta, which predicted GDP growth of 0.2%. GDP revisions for the fourth quarter of last year remained unchanged at 2.2%.

Exports continued to serve as the biggest drag on the U.S. economy, underscoring the impact of the stronger dollar and the extended West Coast port strike. Real exports of goods and services decreased 7.2 percent in the first quarter, in comparison with a increase of 4.5 percent in the fourth. In terms of price data, the GDP Price Index remained at minus 0.1 -- pulled down by lower energy prices. For the fourth quarter of last year, the level was unchanged – also at minus 0.1.

The soft data weighed on the dollar which continued to retreat against the euro.

The FOMC appears uncertain on the timing of its first interest rate hike since 2009, amid a possible growing divide between Fed governors on a date for lift-off. Although the Fed has not ruled out lift-off in June, analysts increasingly believe that a rate hike will not occur until the fall. The CME Group (NASDAQ:NASDAQ:CME), for instance, isn't pricing a rate hike in its models until October.