Investing.com – Gold prices reversed early gains on Wednesday, to close back in on two month lows ahead of a Federal Reserve meeting that is expected to point to another two or possibly even three rate hikes this year.
for June delivery on the Comex division of the New York Mercantile Exchange were down $1.60 or 0.12% to $1,305.00 a troy ounce by 10:46 AM ET (14:46 GMT), closing back in on Tuesday’s low of $1,302.40, which was the weakest since March 1.
Gold weakened as the , which measures the greenback’s strength against a basket of six major currencies, rose to its highest levels since December, up 0.14% to 92.43.
A stronger U.S. currency makes dollar denominated gold more expensive for overseas buyers.
Demand for the dollar continued to be underpinned after data showing that U.S. private employers added in April, slightly higher than economists’ expectations. The upbeat jobs data cemented expectations for a June rate hike by the Fed.
While the Fed is expected to keep after its meeting later Wednesday policymakers are widely expected to line up their next rate hike in June against the backdrop of a strengthening U.S. economy.
Fed officials projected three increases in 2018 at their meetings December and March, although an increasing number of investors now see four hikes as possible.
Markets are also looking ahead to Friday’s U.S. employment report for April, which could provide further signs of strength in the world’s largest economy.
Expectations for a faster pace of rate hikes tend to be bearish for gold, which struggles to compete with yield bearing assets when interest rates rise.
In other precious metal trade, were up 1.88% to $16.43, while rose 0.3% to $896.90.
Among base metals, gained 1% to trade at $3.069 a pound.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Source: Investing.com