By Rachel Koning Beals
Gold futures were trading little changed Wednesday after logging their highest settlement in nearly three weeks a day earlier as investors pared expectations for how aggressively the Federal Reserve would move to increase interest rates.
The interest-rate debate continues to change with each data point and Fed speaker, including a hawkish-sounding John Williams in a late-Tuesday speech.
December gold GCZ6, +0.13% slipped 90 cents, or less than 0.1%, to $1,353.10 an ounce. The contract closed at $1,354.00 in the previous session, its highest since Aug. 18, according to FactSet data. The session’s dollar and percentage gains were the largest since June 24, when prices rallied by more than $59 an ounce, or 4.7%, in the wake of the U.K.’s decision to break from the European Union.
The dollar fell, and precious metals gained, on Tuesday after a report showed a drop in a U.S. service-sector index to its weakest in over six years. That report fueled speculation that the Fed could take a pass on raising interest rates later this month, although the panel may still signal the chance for a late-year rate hike. Wednesday’s economic lineup includes a Fed-watched measure of job openings at 10 a.m. Eastern, and the central bank’s own beige book report that collects business feedback from across the Fed’s districts. The anecdotal account of current economic conditions in the Fed’s 12 regional districts is slated to be released at 2 p.m. Eastern.
A slow-moving Fed is positive news for gold bulls as gold, which doesn’t carry interest, is typically more appealing in a low-rate environment. U.S. currency weakness is also a positive for dollar-priced gold, making it relatively cheaper to buyers using other currencies.