• Gold prices hovered near their lowest in nearly five months on Wednesday as investors awaited an expected U.S. interest rate increase and clues from the U.S. Federal Reserve on its plans for further hikes next year.
• Spot gold was up 0.29 percent at $1,247.11 an ounce by 1:36 p.m. EST (1836 GMT). On Tuesday it touched $1,235.92, the lowest since July20.
U.S. gold futures for February delivery settled up $6.90, or 0.6 percent, at $1,248.60 per ounce.
• The Federal Reserve raised interest rates on Wednesday but left its rate outlook for the coming years unchanged even as policymakers projected a short-term jump in U.S. economic growth from the Trump administration’s proposed tax cuts.
• Analysts at ScotiaMocatta said momentum indicators showed gold could reach its July low of $1,204.90.
• However, if gold rallies along with the expected 25 basis point interest rate hike, "it shows participants feel that 25 basis point hike is not quite enough at the exact moment," said Michael Matousek, head trader at U.S. Global Investors in San Antonio.
• The Fed has increased rates twice this year and is expected to raise them three more times in 2018.
• Meanwhile, the U.S. dollar and U.S. yields fell after data showed sluggish growth in consumer prices, contradicting signs that inflation may be firming and suggesting the Fed may raise rates more slowly next year. Global shares were close to record highs, continuing a rally that has attracted investment away from gold.
• In other precious metals, silver was up 0.9 percent at $15.86 an ounce after hitting a five-month low of $15.59. Platinum was up 0.1 percent at $877.50 an ounce after touching its lowest since February 2016 at $868.80 on Tuesday.
Palladium was up 0.2 percent at $1,014.40 an ounce.
Reference: Kitco, Reuters
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