Investing.com - Gold eased on Tuesday in Asia after an early round of bargain hunting as investors look beyond the widely expected Fed rate hike this month for any new language on the pace of increases going forward.
On the Comex division of the New York Mercantile Exchange gold fell 0.07% to $1,175.65 a troy ounce. Elsewhere in metals trading, silver for March delivery on the Comex rose 0.08% to $16.913 a troy ounce, while copper for March delivery fell 0.45% to $2.682 a pound.
Overnight, gold prices fell more than 1% on Monday as strength in equity markets hit safe haven demand for the precious metal and as expectations for a U.S. rate hike this month continued to weigh.
Gold initially gained after Italian voters rejected a referendum on constitutional changes backed by the government, prompting Prime Minister Matteo Renzi to step down and sending the euro to 20-month lows.
But European stock markets and the single currency rebounded as the referendum outcome had been largely priced in by markets.
Investors were also reassured after the European Central Bank said last week that it was prepared to temporarily step up purchases of Italian government bonds should the referendum results drive up borrowing costs.
Stronger risk appetite curbs the appeal of traditional safe-haven assets, such as gold.
A report from the Institute of Supply Management on Monday showed that gauge of non-manufacturing activity hit a one-year high in November, adding to optimism over the economic outlook.
The precious metal fell almost 8% in November on the back of expectations 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.
Expectations of tighter monetary policy tend to weigh on gold, which struggles to compete with yield-bearing assets when borrowing costs rise. Overnight, New York Fed President William Dudley said on Monday it was too soon for the Fed to judge whether its plan for gradual interest rate hikes needed adjusting under a Trump administration.