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Gold prices weaker in Asia as investors cautious ahead of Yellen views

Published 08/23/2016, 07:48 PM
Updated 08/23/2016, 07:50 PM
© Reuters.  Gold drops in Asia

© Reuters. Gold drops in Asia

Investing.com - Gold dipped in Asia on Wednesday with the focus on remarks by the Fed chief at the end of the week to see if recent hawkish views by colleagues on the need to hike interest rates soon are repeated and expanded.

Gold for December delivery on the Comex division of the New York Mercantile Exchange eased 0.29% to $1,342.15 a troy ounce, while silver futures dipped 0.48% to $18.832 a troy ounce and copper futures gained 0.09% to $2.116 a pound.

Overnight, gold prices were modestly higher in North American trade on Tuesday, moving away from the prior session's two-week low as the U.S. dollar weakened with markets in wait and see mode ahead of a speech by Federal Reserve Chair Janet Yellen later this week that could provide clues about the timing of a U.S interest rate hike.

Yellen may provide fresh clues on the timing of the next U.S. rate hike at a speech during an annual meeting of central bankers in Jackson Hole, Wyoming, on Friday. The annual Fed symposium has sometimes been used by Fed chairs to make important policy statements.

On Monday, the yellow metal dropped to a two-week low of $1,335.40 amid indications the Federal Reserve could raise interest rates as early as next month following hawkish comments from several Fed officials.

According to Investing.com's Fed Rate Monitor Tool, investors are pricing in an 18% chance of a rate hike by September, up from 12% at the start of last week. December odds were at around 50%.

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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