Investing.com – Gold prices steadied on Wednesday after the dollar rebounded on strong economic data as traders awaited the release of the Federal Reserve’s December meeting minutes.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose by $1.40, or 0.11%, to $1,317.50 a troy ounce.
Gold futures turned positive as ongoing geopolitical uncertainty stoked safe-haven demand offsetting a rebound in the dollar which followed economic reports pointing to underlying strength in the economy.
The Institute for Supply Management (ISM) index of national factory activity rose to a reading of 59.7 in December from 58.2 in the previous month. That beat economists for forecast for reading of 58.2.
A reading above 50 indicates growth in manufacturing, well below 50 indicates contraction.
The Commerce Department said construction spending rose 0.8% to a record of $1.257 trillion in November, topping economists forecast for a 0.6% rise.
The duo of reports comes ahead of the Federal Reserve’s December meeting minutes which is expected to be carefully parsed for clues on the Fed’s outlook concerning the progress of US the economy and inflation.
Following its decision to raise its benchmark rate in December, the Federal said “Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.” Inflation remains well below the central bank’s 2% target.
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 precious metal trade, silver futures rose 0.43% to $17.28 a troy ounce, while platinum futures gained 1.88% to $965.60.
Copper traded at $3.26, down 0.61%, while natural gas fell 1.51% to $3.01.