Gold edges lower as dollar gains after hawkish Fed minutes
By Sethuraman N R and Swati Verma (Reuters) - Gold prices edged lower on Wednesday as the U.S. dollar strengthened after minutes from the Federal Reserve's September meeting cemented expectations for more interest rate hikes by the U.S. central bank
By Sethuraman N R and Swati Verma
(Reuters) - Gold prices edged lower on Wednesday as the U.S. dollar strengthened after minutes from the Federal Reserve's September meeting cemented expectations for more interest rate hikes by the U.S. central bank.
Spot gold was down 0.1 percent at $1,222.56 per ounce at 3:09 p.m. EDT (1909 GMT). U.S. gold futures settled down $3.6, or 0.29 percent, at $1,227.4 an ounce.
"The fact that the Fed minutes signal more rate hikes is a hawkish statement. Higher rates mean lower gold, typically," said Bob Haberkorn, senior market strategist at RJO Futures.
"Gold is competing with higher rates by the Fed, and the minutes show that policy is going to continue for the time being," Haberkorn said.
Higher U.S. interest rates tend to boost the dollar, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
Every Federal Reserve policy maker backed raising interest rates last month, according to the September meeting minutes released on Wednesday.
The Fed hiked rates for the third time this year, and the display of unanimity at the meeting could bolster expectations the committee will raise rates again in December.
The U.S. dollar index rose to its highest level in a week, while a gauge of stocks across the world dipped. [USD/] [MKTS/GLOB]
Gold was still trading just below the 2-1/2-month peak of $1,233.26 per ounce scaled on Monday.
"The selling is contained due to the many other factors supporting gold which investors see in the headlines about U.S. politics, 20 days away for midterm elections, (the) Saudi problem and Brexit," said George Gero, managing director at RBC Wealth Management.
Gold is often seen as an alternative investment during times of political and financial uncertainty.
Gold was also getting a leg from nervous shorts, who are trying to pull out, Saxo Bank analyst Ole Hansen said.
"The market was surprised by the extended short positions and the spike indicated a lot of traders were wrong-footed. It also indicates that the dips are being used to cover the short positions."
Bullion is testing resistance at the 100-day moving average of about $1,226, and a convincing break above that is seen as a bullish sign for investors who follow technical signals.
Meanwhile, some central banks have taken their holdings of gold to record levels in recent months in an effort to maintain the value of their currencies against a rising greenback.
In other metals, silver slipped 0.2 percent to $14.62 per ounce, platinum fell 0.4 percent to $833.30 and palladium was down 0.7 percent at $1,071.00.
(Reporting Nallur Sethuraman, Sumita Layek and Swati Verma in Bengaluru; Editing by Will Dunham, Chris Reese and Jonathan Oatis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.