Gold holds steady ahead of FOMC minutes

Investing.com - Gold prices held steady on Wednesday, as investors looked ahead to the minutes of the Federal Reserve’s October meeting, due out later in the day, for any clues on the possible timing of an interest rate increase.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery tacked on 40 cents, or 0.03%, to trade at $1,197.50 a troy ounce during U.S. morning hours.

Futures were likely to find support at $1,146.00, the low from November 14, and resistance at $1,216.50, the high from October 30.

The Fed will release the minutes of its October policy meeting, at which it ended its bond-buying program in a widely expected decision, later in the session.

Gold prices showed little reaction to mixed U.S. housing data released earlier.

The Commerce Department reported that housing starts fell 2.8% to an annual rate of 1.009 million, compared to expectations for a rate of 1.025 million.

However, the number of building permits issued last month jumped 4.8% to 1.080 million, the most since June 2008.

On Tuesday, gold prices hit $1,204.10 an ounce, the most since October 30, as an improving technical outlook and a weaker U.S. dollar lured investors back to the market.

Gold prices have been well-supported in recent days as investors returned to the market amid bullish chart signals. Prices are up nearly 6% since hitting a four-and-a-half-year low of $1,130.40 on November 7.

Despite recent gains, gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Fed to start raising interest rates sooner and faster than previously thought.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Also on the Comex, silver futures for December delivery traded at $16.29 a troy ounce, up 11.9 cents, or 0.74%.

Elsewhere in metals trading, copper for December delivery rallied 3.9 cents, or 1.29%, to trade at $3.041 a pound, amid speculation policymakers around the world will have to introduce further stimulus measures to support the global economy and boost growth.