Investing.com -- Gold futures fell mildly to fresh one-month lows on Thursday, as Federal Reserve chair Janet Yellen reiterated that a December rate hike could be on the table if the U.S. economy demonstrates continued improvement over the next few weeks.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded between $1,106.30 and $1,122.30 an ounce before settling at $1,110.30, down 3.80 or 0.35%. Gold futures closed lower for the sixth consecutive session. Since peaking above $1,185 an ounce in mid-October, the precious metal has closed in the green in only four of the last 17 trading days. During the period, gold has lost nearly 6% in value.
Gold likely gained support at $1,098.20, the low from September 11 and was met with resistance at $1,189.00, the high from Oct. 14.
In testimony before the House Financial Services Committee on Wednesday morning, Yellen noted that the U.S. economy is "performing well," amid solid increases in domestic spending, as some of the downside risks related to the global economic slowdown over the summer have faded. The Federal Open Market Committee, Yellen said, also expects long-term inflation to move toward its targeted goal of 2%, as temporary drags from a stronger dollar and lower energy prices recede.
The U.S. Department of Labor's Bureau of Labor statistics will release two monthly national employment reports before the FOMC next meets in December, including one on Friday. The Commerce Department's Bureau of Economic Analysis will also release its second estimate of U.S. third quarter GDP and its October report on Personal Income and Outlays later this month.
"If the incoming information supports that expectation then our statement indicates that December would be a live possibility. Importantly, we've made no decision about it," Yellen said in her testimony.
Yellen emphasized that lift-off might be justified in December to ensure that the Fed moves deliberately over the next year when it finally decides to abandon a zero interest rate policy. An internal memo leaked by the Fed in June indicated that the FOMC anticipates that its benchmark Federal Funds Rate will increase to 1.26% over the next year, a level which would likely require three to four rate hikes before next summer.
"The committee does feel that moving in a timely fashion if the data and outlook justify such a move is a prudent thing to do because we will be able to move at a more gradual and measured pace," Yellen added. "We fully expect that the economy will evolve in such a way that we can move at a very gradual pace and of course after we do so we will be watching very carefully whether our expectations are realized."
Following Yellen's comments, the CME Group's (O:CME) Fed watch placed the odds of a December rate hike at 60%, up from 52.3% a session earlier. Yields on the U.S. 2-Year also surged to an intraday-high of 0.82%, their highest level since 2011.
A rate hike is viewed as bearish for gold, which struggles to compete with high yield assets.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged more than 0.80% to an intraday high of 98.08, reaching a fresh 10-week high. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for December delivery fell 0.159 or 1.04% to 15.080 an ounce.
Copper for December delivery dropped 0.009 or 0.39% to 2.321 a pound.