Gold prices were relatively flat in North American morning trade on Wednesday, staying near the lowest level in around five weeks amid expectations for more U.S. interest rate hikes this year.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Comex gold futures were steady at $1,243.55 a troy ounce by 9:25AM ET (1325GMT). Prices of the yellow metal notched a second-straight decline on Tuesday after falling to its lowest since May 17 at $1,242.40.
Also on the Comex, silver futures were down 5.0 cents, or roughly 0.3%, to $16.36 a troy ounce, its lowest since May 12.
Market expectations for another Fed rate hike later this year have improved in wake of hawkish comments made by influential New York Fed Chief William Dudley earlier this week.
Dudley gave an upbeat assessment of the economy on Monday and warned against the central bank taking a pause in the tightening cycle. He added that U.S. inflation is a bit low but should rise alongside wages as the labor market continues to improve, allowing the Fed to continue gradually tightening U.S. monetary policy.
The remarks echoed similar comments made by Fed Chair Janet Yellen in last week’s press conference after the central bank hiked rates for the second time this year and maintained plans to go ahead with another rate hike by year-end.
The Fed also provided greater detail about how it plans to reduce its massive $4.5 trillion balance sheet.
Source: UK Investing.com