Investing.com - Gold futures fell to a fresh three-month low on Wednesday, amid speculation Federal Reserve officials could adopt more hawkish language at their meeting next week.
On the Comex division of the New York Mercantile Exchange, gold for December delivery inched up 0.16%, or $2.00, to trade at $1,250.50 a troy ounce during U.S. morning hours. Prices fell to $1,247.70 earlier, a level not seen since June 6.
Futures were likely to find support at $1,241.20, the low from June 5 and resistance at $1,272.60, the high from September 8.
Also on the Comex, silver for December delivery tacked on 0.43%, or 8.2 cents, to trade at $19.00 a troy ounce. Silver futures hit $18.89 on Tuesday, the lowest since June 5.
The U.S. dollar index, which tracks the performance of the greenback against a basket of currencies, rose to a 15-month high as expectations for higher U.S. interest rates continued to dampen sentiment for the precious metal.
The dollar remained well bid after a study by the San Francisco Federal Reserve suggested that investors' expectations for rate hikes lag those of the Fed.
The research published on Monday underlined expectations that the Fed could signal a rate hike at its next policy meeting on September 16-17, possibly by omitting mention of its commitment to keep rates low "for a considerable time".
Gold costs money to store and struggles to compete yield-bearing assets when interest rates are on the rise.
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 in metals trading, copper for December delivery rose 0.36%, or 1.1 cents, to trade at $3.113 a pound after China said it will accelerate economic policy changes to promote growth.
China is the world's largest copper consumer, accounting for nearly 40% of global demand.