Investing.com -- Gold futures remained near five-year lows on Wednesday, as a trio of policymakers from the Federal Reserve sent further indications that the U.S. Central Bank will raise short-term interest rates when it convenes next at a meeting in mid-December.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a tight range between $1,064.50 and $1,071.60 an ounce, before settling at $1,067.70, down 0.90 or 0.08% on the session. It came one day after gold crashed more than $15 an ounce as the dollar surged to fresh seven-month highs, extending sharp gains from last week. Although gold continues to hover near its lowest level since February, 2010, it still needs to suffer another dramatic losing streak to dip below $1,000 an ounce. The precious metal has not fallen to such a level since the height of the Financial Crisis.
Appearing on a panel alongside New York Fed president William Dudley and Cleveland Fed president Loretta Mester, Atlanta Fed president Dennis Lockhart indicated that disruptions in the global financial markets have subsided enough for the Fed to strongly consider a rate hike in December. The Fed's benchmark Federal Funds Rate has remained at its current level between zero and 0.25% for nearly seven years since December, 2008.
"I am comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions," Lockhart said at the Clearing House Payments System Risk Symposium in New York. "I believe it will soon be appropriate to begin a new policy phase."
Mester reiterated her views that conditions in the economy have improved enough to handle a modest rate increase. While the president of the Federal Reserve of Cleveland does not own a vote at the December meeting, she will regain one in the Fed's next cycle.
Dudley, meanwhile, noted that he does not expect to see any unpredictable market reactions when the Fed eventually decides to normalize policy since the potential move has been so well-documented in recent weeks. The New York Fed has a number of tools at its disposal to help adjust the Fed Funds Rate once the decision is made.
The CME Group's (O:CME) Fed Watch increased the probability of a December rate hike by eight points to 72% on Wednesday following the remarks.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, stood at 99.77 in U.S. Afternoon Trading, up 0.05% on the session. At one point, it remained mere percentage points from the 100 threshold, a level it has not cleared since March 17.
Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for December delivery lost 0.121 or 0.85% to 14.050 an ounce.
Copper for December delivery dipped 0.026 or 1.24% to 2.078 a pound.