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Gold prices down in Asia with investors looking to likely Fed rate hike

Published 11/22/2015, 06:17 PM
Updated 11/22/2015, 06:19 PM
© Reuters.  Gold dips in Asia with eyes on Fed
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Investing.com - Gold prices fell in Asia on Monday with little regional data at hand and investors firmly focused on a likely Federal Reserve rate hike in December.

Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped 0.20% to $1,074.80.

Also on the Comex, silver futures for December delivery eased 0.39% to $14.090 a troy ounce.

Elsewhere in metals trading, copper for December delivery dropped 0.51% at $2.049 a pound.

Copper has weakened as the possibility of higher borrowing costs in the U.S., a broadly stronger U.S. dollar and slower global economic growth, especially in China, weighed.

Prices of the red metal are down nearly 30% since May as fears of a China-led global economic slowdown spooked traders and rattled sentiment.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.

In the week ahead, market players will focus on a flurry of U.S. economic data due on Wednesday for further indications on the strength of the economy and the likelihood of a December rate hike.

U.S. markets will be closed Thursday for the Thanksgiving holiday and Friday will be a half day.

On Monday, markets in Japan are shut for a holiday. The euro zone is to release survey data on manufacturing and service sector activity. Germany and France are also to release individual reports.
The U.S. is to release private sector data on existing home sales.

Last week, gold prices ended the week near the lowest level since February 2010 on Friday, as market players prepared for a hike in interest rates by the Federal Reserve next month.

Gold fell to $1,062.00 on Wednesday, a level not seen in almost six years, as investors cut holdings of the precious metal amid expectations the Fed will raise rates for the first time in nearly a decade at its mid-December meeting.
For the week, prices of the precious metal declined $15.60, or 0.41%, the fifth straight weekly loss and the longest stretch of weekly declines since late July.

Minutes of the Fed's October meeting published Wednesday showed that most members of the Federal Open Market Committee believe a rate hike next month would be appropriate but would then proceed with caution on further tightening, assessing economic conditions closely.

Recent comments by Fed officials, including Janet Yellen, have bolstered expectations the U.S. central bank will raise interest rates for the first time in nine years when it meets December 15-16.

Expectations of higher borrowing rates going forward are considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

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