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Gold falls slightly in Asia with Fed rate hike more likely this year

Published 08/30/2016, 08:36 PM
Updated 08/30/2016, 08:37 PM
© Reuters.  Gold dips in Asia

© Reuters. Gold dips in Asia

Investing.com - Gold prices drifted lower in Asia on Wednesday with expectations growing for a Fed rate hike by the end of the year.

Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.09% to $1,315.25 a troy ounce.

Also on the Comex, silver futures for September delivery dipped 0.04% to $18.570 a troy unce, while copper futures rose 0.10% to $2.079 a pound.

Overnight, gold prices faced pressure during North American hours on Tuesday.

Market players are also looking ahead to Friday’s nonfarm payrolls report for further hints on the timing of the next U.S. rate hike. The consensus forecast is that the data will show jobs growth of 180,000 in August, following an increase of 255,000 in the preceding month.

In an interview with Bloomberg TV earlier in the day, Fed Vice Chairman Stanley Fischer said the U.S. job market is nearly at full strength and the pace of interest rate increases by the U.S. central bank will depend on how well the economy is doing.

Fischer did not comment on the timing of the next Fed rate hike but said "we choose the pace on basis of data."

According to Investing.com's Fed Rate Monitor Tool, investors are pricing in a 24% chance of a rate hike by September.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

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