Gold Falls to Lowest Level in a Month
Gold prices fell to their lowest level in a month Wednesday, as investors reacted to hawkish comments from the Federal Reserve.
Gold for December delivery was recently down 1.1% at $1,287.80 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest price since late August.
In a Tuesday speech, Fed Chairwoman Janet Yellen defended the central bank's measured pace of interest rate increases, but said it should be wary of raising rates too slowly to avoid sparking future inflation.
The comments bolster the case of investors betting that the Fed will raise rates for a third time this year. Fed-fund futures tracked by CME Group show investors now project a roughly 83% chance of a rate rise by December, compared with about 73% a week ago.
Gold struggles to compete with yield-bearing assets like Treasurys when borrowing costs rise.
Expectations of rising inflation could support gold prices in the longer term, said George Gero, managing director at RBC Capital Markets. Some investors buy the metal as a hedge against higher consumer prices.
In base metals, copper for December delivery rose 0.1% to $2.9225 a pound.
Write to Ira Iosebashvili at ira.iosebashvili@wsj.com
Gold prices fell to their lowest level in more than a month Wednesday, as investors reacted to hawkish comments from the Federal Reserve.
Gold for December delivery was recently down 1.1% at $1,284.80 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest price since late August.
In a Tuesday speech, Fed Chairwoman Janet Yellen defended the central bank's measured pace of interest rate increases, but said it should be wary of raising rates too slowly to avoid sparking future inflation.
The comments bolster the case of investors betting that the Fed will raise rates for a third time this year. Fed-fund futures tracked by CME Group show investors now project a roughly 83% chance of a rate rise by December, compared with about 73% a week ago.
Gold struggles to compete with yield-bearing assets like Treasurys when borrowing costs rise.
Expectations of rising inflation could support gold prices in the longer term, said George Gero, managing director at RBC Capital Markets. Some investors buy the metal as a hedge against higher consumer prices.
In base metals, copper for December delivery rose 0.4% to $2.9229 a pound.
Write to Ira Iosebashvili at ira.iosebashvili@wsj.com
(END) Dow Jones Newswires
September 27, 2017 16:48 ET (20:48 GMT)