Weak economic statistics out of China hurt copper prices on Wednesday, and gold prices dropped even more as anxiety mounted ahead of the completion of a Fed meeting and a significant Treasury announcement later in the day.

Spot gold slumped by 0.4% to $1,975.99 per ounce, meanwhile gold futures dropped by 0.5% to $1,984.45 per ounce. 

As worries about the Israel-Hamas conflict's possible economic influence decreased due to the conflict's lack of significant escalation, dealers likewise priced in a lesser risk premium for gold.

Although the war helped gold record huge gains in October, it has seen significant profit-taking in recent sessions, particularly as the greenback and Treasury yields increased ahead of this week's Fed meeting.

The outcome of the Fed meeting, which is later in the day and where it is generally anticipated that the central bank would maintain interest rates, was suddenly the main focus of the markets.

But considering recent indications of persistent U.S. inflation, the health of the labor market, and the general resiliency of the economy, the bank is also probably going to stick to its higher-for-longer policy on rates.