Gold Prices Hits 7-Week Low Ahead of Fed Rate Hike Prospects Boost Dollar

Gold Prices Hits 7-Week Low Ahead of Fed Rate Hike Prospects Boost Dollar

Gold futures prices added to overnight losses on Wednesday, falling to a seven-week low as investors expectations of an early interest rate hike by the U.S. Federal Reserve pushed the dollar to a near two-month high.

Gold for June delivery on the Comex Exchange sank to an intraday low of $1,222.50 a troy ounce, a level not seen since April 6. It last stood at $1,223.80.

Spot gold was little changed at $1,226.41 per ounce. The metal fell to $1,223 earlier in the session, the lowest since April 7.

The probabilities of a rate rise from the Fed for June stood at about 40% Wednesday morning, compared with 30% a day earlier and compared with only 4% a week ago, according to market futures. July probabilities were about 60%.

Market players close attention to comments a total of Fed officials later in the day to find more references about the timing of a rate hike lends US .

Philadelphia Fed President Patrick Harker speaks about the economy at an event in Philadelphia at 13: 00GMT, or 09 a.m. ET. President of the Minneapolis Fed Neel Kashari must be submitted comments on Petroleum Conference Williston Basin of North Dakota at 15: 40GMT, or 11:40 ET, while the president of the Dallas Fed, Rob Kaplan talks Houston at 18: 00GMT, or 14:00 ET.
The dollar stood near a two-month high against a basket of currencies on Wednesday after strong housing data supported the US if the Fed to raise rates anytime soon.

The sales of US single-family homes registered their biggest jump in 24 years in April, playing more than 8 ½ years as purchases increased in general terms, a sign of growing confidence in the prospects of the economy.

Holdings in SPDR Gold Trust fund, fell 0.44 percent to 868.66 tonnes on Tuesday, the first decline in a month.

Gold for delivery in June dropped Rs 140 or 0.48 per cent to Rs 29,160 per 10 gram at the Multi Commodity Exchange as speculators trimmed their positions.

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