Investing.com - Gold fell in Asia on Wednesday with Fed minutes later in the day expected to set the tone for insight into chances of a March rate hike.
Gold for April delivery on the Comex division of the New York Mercantile Exchange eased 0.13% to $1,237.25 a troy ounce, while copper futurs inched up 0.04% to $2.743 a pound as investors watched by 13:05 ET, after falling to a session low of $1,226.50
Copper prices are up more than 40% since January 2016 due to worries about supplies after disruptions in top producers Chile and Indonesia. A strike continues at BHP Billiton (LON:BLT)'s Escondida mine in Chile, the world's largest, while all production has stopped at Freeport-McMoRan's giant Grasberg copper mine in Indonesia
Overnight, gGold bounced off session lows but ultimately traded lower on Tuesday, pressured by a spike in the dollar, after two Federal Reserve policymakers hinted at a possible rate hike in March.
Gold started the session on back foot, after the dollar surged to session highs, following bullish comments from two Federal Reserve policymakers.
Philadelphia Fed President Patrick Harker said Monday that he would likely support an interest rate increase at the central bank’s next meeting in March should the economy continue to strengthen.
Harker’s comments, came fresh of the heels of Cleveland Fed President Loretta Mester's statement, the Cleveland Fed member said she would be “comfortable” raising interest rates at this point as inflation pressures pick up.
The yellow-metal recovered from an early session slump, as the dollar was pegged back, following a report from Markit, a market research group, which revealed U.S. Services Purchasing Managers’ Index (PMI) eased to 53.9 in February, falling short of analysts’ expectation of increase to 55.8.
Market participants’ turn their attention to the minutes from the Fed’s January meeting, due to be released on Wednesday, for clues on the likelihood of a March interest rate hike.
Gold 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.