Investing.com - Gold prices fell to the lowest levels since February on Wednesday after the dollar surged to fresh 14-year highs as upbeat U.S. economic reports underlined expectations for higher interest rates.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was down 2.08% to $1,185.05 a troy ounce by 1017 ET, a level not seen since February 10.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, surged to 101.81, the strongest level since April 2003.
The dollar rallied after data showing that U.S. durable goods orders rebounded in October. The report supported the view that the Federal Reserve will raise interest rates next month.
Gold is priced in dollars and becomes more expensive to holders of other currencies when the dollar strengthens.
According to Investing.com's Fed Rate Monitor Tool, odds for a rate hike at the Fed's December 13-14 meeting are at 100%.
Prices of the yellow metal had already come under pressure this month amid the view that increased U.S. fiscal spending under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.
Gold 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.
Elsewhere in metals trading, silver futures for December delivery were at $16.22 a troy ounce, while copper futures traded at $2.581 a pound.
Copper prices have risen around 17% so far this month on expectations of rising demand from China and an increase in infrastructure spending in the U.S. when Donald Trump becomes president.
China and the U.S. are the top two consumers of the industrial metal.