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MTECHTIPS:- Gold futures struggle as Fed rate hike outlook weighs

MTECHTIPS:- Gold futures struggle as Fed rate hike outlook weighs

Gold futures edged lower on Wednesday, as expectations for a U.S. rate hike in the coming months dampened the appeal of the precious metal. Gold for December delivery on the Comex division of the New York Mercantile Exchange shed $2.20, or 0.2%, to trade at $1,124.60 a troy ounce during European morning hours. A day earlier, gold declined $4.90, or 0.43%, after data showed U.S. consumer confidence improved unexpectedly in September. The upbeat data boosted optimism over the health of the economy and supported the case for a rate hike this year. Market players looked ahead to key U.S. data later in the day for further indications on the strength of the economy and the likelihood of a near-term interest rate hike. The U.S. was to release the ADP jobs report for September at 8:15AM Eastern time, followed by the Chicago purchasing managers’ index, due for release at 9:45AM ET. Traders will also be keeping an eye on Fed Chair Janet Yellen, who is due to give welcome remarks at the Federal Reserve’s annual community banking conference in St. Louis later on Wednesday. Gold futures are on track for a 4% drop in the three months ending September 30 amid indications the Federal Reserve was likely to raise interest rates in 2015. Most economists believe the U.S. central bank will begin raising rates in December after holding policy steady in September due to concerns over the global economy, particularly China. Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates for the first time since 2006 at some point this year. The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.



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