Metals: Gold Falls as Fed Considers Faster Pace of Rate Increases

By Ira Iosebashvili Features Dow Jones Newswires

Gold prices edged higher Wednesday, as investors awaited minutes from the Federal Reserve's latest meeting.

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Gold for February delivery was recently up 0.2%, at $1,318.80 a troy ounce, on the Comex division of the New York Mercantile Exchange.

Minutes from the Fed's December meeting are due out at 2 p.m. EST. Signs that the central bank is leaning toward a more cautious stance on interest rates this year could fuel further gains in gold, which has risen more than 4% in the past month. Gold struggles to compete with yield-bearing investments when interest rates rise. The Fed has signaled three more rate increases in 2018, though inflation remains muted.

Investors are also awaiting Friday's U.S. employment data for signs of whether stronger economic growth is stimulating higher wages.

Gold had its best year since 2010 last year with a 14% gain, boosted by a weakening dollar and political tensions around the world.

In base metals, copper for March delivery was down 1%, to $3.2430 a pound.

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Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

Gold prices fell in aftermarket trading Wednesday after minutes from the Federal Reserve's latest monetary policy meeting showed the central bank mulling a faster pace of rate increases this year.

Gold for January delivery was recently down 0.3% at $1,312.10 a troy ounce in electronic trading. Prices closed up 0.2% at $1,316.20 a troy ounce in regular trading on the Comex division of the New York Mercantile Exchange.

Federal Reserve officials in December debated whether new tax cuts would require them to raise short-term interest rates faster this year after lifting them three times last year, the minutes showed. Gold struggles to compete with yield-bearing assets when rates rise.

The hawkish headlines are giving investors an excuse to lock in recent gains, said George Gero, managing director at RBC Capital Markets, in a note to clients.

Gold had its best year since 2010 last year with a 14% gain, boosted by a weakening dollar and political tensions around the world.

Investors are also awaiting Friday's U.S. employment report on whether stronger economic growth is stimulating higher wages.

In base metals, copper for January delivery was down 0.6% to $3.2370 a pound.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

(END) Dow Jones Newswires

January 03, 2018 15:14 ET (20:14 GMT)