WASHINGTON (dpa-AFX) - After retreating from near 6-month highs earlier in the session, gold futures rebounded and settled higher on Wednesday, as the dollar softened with investors betting on dovish comments by the Federal Reserve later in the day.
The dollar index was hovering around 96.10, losing about 0.5% , after having dropped to a low of 96.00 earlier in the day.
The Federal Reserve, which is expected to raise interest rate by 25 basis points, is likely to sound dovish with regard to its stance on future rate increases. Recent comments by the Fed Chair Jerome Powell and a couple of Fed officials suggest the central bank might well pause monetary tightening sometime in the coming year. Earlier, the Fed was hinting at three increases in 2019.
Recent disappointing economic data, low inflation, and concerns about the ongoing trade dispute between the U.S. and China may also prompt the central bank to soften its stance on rate hikes.
On the trade war front, reports suggest the U.S. and China will hold a series of trade talks in January in order to strike a preliminary deal to resolve the issues.
Meanwhile, Italy's populist government has reportedly reached an informal agreement with the European Union on the country's disputed 2019 budget following discussions with senior officials in Brussels.
Gold futures for February surged to $1,262.10 an ounce before settling with a gain of $2.80, or 0.2%, at $1,256.40 an ounce, the highest settlement since 10 July 2018. On Tuesday, gold futures settled at $1,253.60 an ounce, gaining $1.80 or 0.1%, for the session.
Silver futures for March settled at $14.818 an ounce, up $0.117 from Tuesday's close of $14.701 an ounce.
Copper futures for March settled at $2.716 per pound, up $0.051 from previous close.
U.S. President Donald Trump, who has been criticizing the Fed for its views on interest rates, once again urged it to refrain from its gradual pace of raising rates.
'Don't let the market become any more illiquid than it already is,' Trump told the Fed in a post on Twitter on Tuesday. 'Stop with the 50 B's. Feel the market, don't just go by meaningless numbers. Good luck!'
In economic news today, a report from the National Association of Realtors showed a significant increase in existing home sales in November.
NAR said existing home sales surged up by 1.9% to an annual rate of 5.32 million in November after jumping by 1.4% to a rate of 5.22 million in October. Economists had expected existing home sales to drop by 0.6%.
Despite the second consecutive monthly increase, existing home sales in November were down by 7% compared to the same month a year ago.
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