Gold trading as become so predictable, climbing in the Asian session and giving back gains in the US session. On Tuesday morning gold was up over $13 to
Gold ticked up for a third session on Wednesday, buoyed by short covering following a dip in the dollar and soft U.S. manufacturing data. Gold edged up 0.1 percent to $1,070.60, after gaining about 1 percent in the past two sessions. U.S. manufacturing contracted in November for the first time in three years, sending the dollar sliding from an 8-1/2 month high reached on Monday. The weakness in the dollar provided some support for the greenback.
Bullion fell to a near-six-year low last month and posted its biggest monthly drop in 2-1/2 years in November as investors believed higher rates could weaken demand for non-interest-paying bullion.
Analysts maintained their negative outlook for gold prices in 2016, mainly on expectations the Fed would slowly raise rates into next year, and said prices could fall below $1,000 per ounce in the coming months. The Fed should use the communication tools at its disposal at its December meeting to spell out a gradual pace of rate increases, Chicago Federal Reserve President Charles Evans said on Tuesday. Gold held two days of gains as a rally in the dollar paused, with Chicago Federal Reserve President Charles Evans saying that he was nervous about the decision on whether interest rates will be increased this month for the first time in nearly a decade.
Ahead of the FOMC gathering on Dec. 15-16, Fed Chair Janet Yellen will address the Economic Club of Washington later today and the Joint Economic Committee of Congress on Thursday. Economists and investors said they’ll be listening for additional clues about what will drive post-liftoff decisions. Odds for a December move are at 72 percent, down from 74 percent on Monday, Fed-fund futures data show.
Holdings in gold-backed exchange-traded products fell for a ninth day on Tuesday, dropping to 1,489.75 metric tons, and the lowest level since February 2009, data compiled by Bloomberg show.