Gold futures plummeted to a seven-week low on Wednesday, extending Tuesday’s losses as expectations for an interest rate hike were bolstered following comments by Fed officials early in the week.
Gold for June delivery in New York fell to an intraday low of $1,220.50 a troy ounce, a price point last seen April 6. It recovered slightly at $1,222.75 by 8:40AM ET, but still down 0.52%, or $6.45.
Market participants are looking ahead to comments from several Federal Reserve officials later in the day for further clues on the timing of a U.S. rate increase.
Patrick Harker, Philadelphia Federal Reserve President, is slated to talk about the economy at an event in Philadelphia at 13:00GMT, or 9:00AM ET. Neel Kashkari, Minneapolis Federal Reserve President, is scheduled to address the delegates at the Williston Basin Petroleum Conference in North Dakota at 15:40GMT, or 11:40AM ET, while Rob Kaplan, Dallas Federal Reserve President, is in Houston for a speaking engagement.
On Tuesday, gold shed $22.30, or 1.78%, after robust U.S. housing numbers boosted investor expectations for a June rake hike.
Also adding pressure to gold is the strong performance of the U.S. dollar, which surged to a two month high on Tuesday.
A stronger U.S. dollar is bad news for gold investors, as it dampens the metal’s appeal as an safe-haven asset. It also makes dollar-denominated commodities more costly for investors holding other currencies.
Elsewhere in metals trading, silver for July delivery eased up 0.22%, or 3.6 cents, to trade at $16.29 a troy ounce, while copper futures gained 1.57%, or 3.3 cents, to $2.099 a pound.