Gold edges lower as markets ponder timing of next Fed rate hike

Gold edges lower

Investing.com - Gold prices edged lower during European morning hours on Tuesday, amid a rise in the dollar as market players awaited further hints on the timing of the next U.S. rate hike.

Gold for April delivery on the Comex division of the New York Mercantile Exchange shed $4.95, or about 0.4%, to $1,234.15 a troy ounce by 3:10AM ET (08:10GMT).

There was no settlement in Comex gold prices on Monday, due to the President’s Day holiday in the U.S.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.35% to 101.27 in early London morning trade, within sight of last week's more than one-month high of 101.75.

Global financial markets will focus on minutes of the Federal Reserve’s latest policy meeting this week as well as housing-related data for more clues on the timing of the next U.S. rate hike.

There are also more than a few Fed speakers in the coming days, including Minneapolis Fed President Neel Kashkari, Philadelphia Fed President Patrick Harker and Atlanta Fed President Dennis Lockhart.

Cleveland Federal Reserve President Loretta Mester said on Monday she would be "comfortable" raising interest rates at this point if the economy maintained its current pace of performance.

Fed Chair Janet Yellen said last week that the U.S. central bank will likely need to raise interest rates at an upcoming meeting, although she flagged considerable uncertainty over economic policy under the Donald Trump administration.

Fed fund futures priced in about a 20% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool. Odds of a June increase was seen at around 70%.

Headlines from Washington will most likely remain in focus in the week ahead, as traders await further details on President Donald Trump's promises of tax reform, deregulation and infrastructure spending.

Also on the Comex, silver futures for March delivery dipped 8.7 cents, or 0.5%, to $17.94 a troy ounce.

Meanwhile, platinum was down 0.4% to $1,002.20, while palladium slumped 1.3%, to $769.08 an ounce.

Elsewhere in metals trading, copper futures rose 3.0 cents, or about 1.1%, to $2.736 a pound, as concerns over supply disruptions in Chile and Indonesia supported prices.

Prices of the red metal rallied to a 20-month peak of $2.822 last week after strikes at BHP Billiton (LON:BLT)'s Chilean Escondida and Freeport McMoran (NYSE:FCX)'s Indonesian Grasberg mine.

Combined, the mines produce roughly 10% of the world's total copper supply.