Investing.com – Gold prices were roughly unchanged on Wednesday amid dollar weakness on the back of weaker-than-expected housing data.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell $2.00, or 0.19%, to $1,283.80 a troy ounce.
Gold prices pared some early-session losses after the dollar turned negative following data showing ongoing weakness in the U.S. housing sector.
The Commerce Department said Tuesday U.S. homebuilding fell 4.7% to a seasonally adjusted annual rate of 1.127 million units in September, well below economists’ estimates of a 0.5% decline.
The report also highlighted a sharp 4.5% slump in building permits to a rate of 1.215 million units. That was below estimates of a fall to 1.245 million units.
The precious metal has fallen sharply from a key $1,300 level amid an uptick U.S. treasury yields on the possibility of more hawkish Federal Reserve chair succeeding Janet Yellen in February.
A Bloomberg report on Monday suggested that President Donald Trump favoured Stanford economist John Taylor as the next leader of the Federal Reserve. Taylor is regarded as one of the more hawkish candidates under consideration.
“Speculation over the identity of the next Fed chair is helping to turn the outlook for the dollar more positive again, with a relatively more hawkish (certainly more than Janet Yellen) John Taylor an increasing possibility. his is helping to drive 2-year Treasury yields ever higher and the dollar stronger.”
Inflation will be in focus later in the session as investors look ahead to the Federal Reserve’s Biege Book due 2pm Eastern, a report on economic conditions across each of the central bank’s districts.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.
In other metals trading, silver futures fell 0.22% to $17.00 while platinum futures fell 1.27% to $922.90.
Copper traded at $3.2, down 1.30% while Natural gas fell by 3.44% to $3.18.