Gold futures settled higher on Wednesday, as the dollar shed ground, extending its weakness from the previous session, amid slightly fading prospects of any early policy tightening by the Fed due to recent weak industrial output data.
The dollar index dropped to 93.54, down by about 0.2% from the previous close, after having advanced to 93.88 earlier in the day.
An uptick in Treasury yields limited gold’s gains. Benchmark 10-year Treasury yields hit five-month peak after Waller said that policymakers may need to adopt “a more aggressive policy response” next year to dampen down price pressures.
Gold futures for December ended up by $14.40 or about 0.8% at $1,784.90 an ounce.
Silver futures for December closed higher by $0.562 at $24.445 an ounce, while Copper futures for December settled at $4.7345 per pound, gaining $0.0315.
Traders are now pricing a full rate hike into the Fed’s September policy meeting next year but many of the world’s central banks are expected to move at a faster pace. The European Central Bank is seen hiking rates by 10 basis points in September.