Investing.com - Gold prices struggled for direction in European trade on Tuesday, pausing after two days of declines, as markets looked ahead to a speech by Federal Reserve Chair Janet Yellen later this week that could shed light on the timing of a U.S interest rate hike.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped 25 cents, or 0.02%, to trade at $1,343.15 a troy ounce by 2:52AM ET (06:52GMT).
On Monday, the yellow metal dropped to a two-week low of $1,335.40 as the U.S. dollar rallied amid indications the Federal Reserve could raise interest rates as early as next month following hawkish comments from several Fed officials.
Fed Chair Janet 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.
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.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.40 early Tuesday, keeping distance from last week's eight-week low of 94.05.