Investing.com - Gold futures fell to a seven-week low in North American trade on Wednesday, extending overnight losses as investors bet that the Federal Reserve was on track to raise interest rates this summer.
Gold for June delivery on the Comex division of the New York Mercantile Exchange sank to an intraday low of $1,220.50 a troy ounce, a level not seen since April 6. It last stood at $1,222.75 by 12:40GMT, or 8:40AM ET, down $6.45, or 0.52%.
Odds of a Fed rate hike for June stood at nearly 40% Wednesday morning, up from 30% a day earlier and compared to just 4% a week ago, according to futures markets. July odds were at about 60%.
Market players will pay close attention to comments from a number of Fed officials later in the day for further hints on the timing of a U.S. rate hike.
Philadelphia Fed President Patrick Harker speaks on the economy at an event in Philadelphia at 13:00GMT, or 9:00AM ET. Minneapolis Fed President Neel Kashkari is due to deliver comments at the Williston Basin Petroleum Conference in North Dakota at 15:40GMT, or 11:40AM ET, while Dallas Fed President Rob Kaplan speaks in Houston at 18:00GMT, or 2:00PM ET.
A day earlier, gold prices lost $22.30, or 1.78%, after robust U.S. housing data supported the case for the Fed to raise rates in the near term. New home sales for April jumped by a more-than-expected 16.6% to a seasonally adjusted annual rate of 619,000 units, the highest level since January 2008.
Gold futures are down 5% so far in May as recent comments from Fed officials as well as minutes of the Fed's April meeting have convinced many analysts and investors that a rate hike in June or July is a real possibility.
The U.S. dollar held at its highest level in nearly two months against a basket of major currencies early Wednesday on hints the Fed is getting closer to raising interest rates.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere on the Comex, silver futures for July delivery eased up 3.6 cents, or 0.22%, to trade at $16.29 a troy ounce during morning hours in New York, while copper futures inched up 3.3 cents, or 1.57%, to $2.099 a pound.