Investing.com – Gold prices hovered above six-week lows on Wednesday as dollar strength continued after uncertainty over a possible US government shutdown eased, reducing investor demand for safe-haven gold.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose by $1.40, or 0.12%, to $1266.40 a troy ounce.
Gold prices struggled to hold onto gains as fears over a possible government shutdown eased amid reports that the GOP leadership in the House and Senate want to pass a bill that would extend the government shutdown deadline to Dec. 22 from Dec. 8.
Expectations for Congress to pass a funding bill stoked sentiment on the greenback as it remained close to session highs, pressuring gold to give up early session gains.
Gold is sensitive to moves higher in U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency, thus reduces demand for precious metal.
Also weighing on the gold was ongoing expectations that the U.S. Federal Reserve will raise interest rates for third time this year at the conclusion of its next meeting on Dec.13.
According to investing.com’s fed rate monitor tool 100% of traders expect the Federal Reserve to raise rates in December.
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