MTECHTIPS;-Gold turns positive; Fed minutes eyed

MTECHTIPS;-Gold turns positive; Fed minutes eyed

MTECHTIPS- Gold prices turned positive on Wednesday, on the back of weaker U.S. housing data as investors looked ahead to the minutes from the Federal Reserve’s July meeting for clues on monetary policy. Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $2.86, or 0.21%, to $1,282.34 a troy ounce. Gold prices pared losses ahead of the release of the minutes from Federal Reserve July policy meeting due later in the session, following an unexpected dip in U.S. housing data. Housing starts dropped 4.8% to a seasonally adjusted annual rate of 1.16 million units, the Commerce Department said on Wednesday. Investors will parse the minutes for clues on when Fed might start to unwind its $4.5 tn balance sheet as well as any update concerning the labor market and inflation. In its July policy statement, the Federal Reserve raised concerns over the slow pace of inflation while pointing out that it expects to begin unwinding its balance sheet “relatively soon”. Ahead of the release, New York Fed chief Bill Dudley said earlier this week, he would favour a third rate hike this year. Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
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