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Gold prices trim losses but remain under pressure

Published 2017-08-16, 08:49 a/m
Updated 2017-08-16, 08:52 a/m
© Reuters. Gold prices bounce off day's lows but upside limited

© Reuters. Gold prices bounce off day's lows but upside limited

Investing.com - Gold prices trimmed losses on Wednesday, after the release of downbeat U.S. housing sector data dampened demand for the greenback, but the precious metal remained under pressure amid an overall rise in risk-appetite.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.16% at $1,277.60, off session lows of $1,274.68.

The yellow metal suffered its steepest one-day drop in nearly six weeks on Tuesday, after strong data on U.S. retail sales and manufacturing activity kept alive the chance of another rate hike by the Federal Reserve this year.

Market participants were looking ahead to the Fed’s most recent policy meeting for indications on future policy moves.

The Fed will release minutes of its most recent policy meeting later in the day at 2:00PM ET (18:00 GMT).

Demand for the safe-haven precious metal also continued to weaken after North Korea said on Tuesday it had delayed a decision on a plan to fire missiles at the U.S. Pacific territory of Guam while it watches U.S. actions a little longer.

However, sentiment on the greenback became vulnerable after the U.S. Commerce Department said on Wednesday that the number of housing starts and building permits both fell in July.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 93.81, off session highs of 94.01.

Gold is sensitive to moves higher in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.

Elsewhere in metals trading, silver futures for September delivery eased 0.09% to $16.699 a troy ounce, while copper futures for September delivery rallied 1.42% to $2.924 a pound.

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