Gold prices mark out small gains in early Asia ahead of Fed officials

Category: Commodities

Gold eked out small gains in early Asia on Wednesday as investors awaited more Federal Reserve comments on the rate outlook.On the Comex division of the New York Mercantile Exchange, gold for February delivery edged up 0.02% to $1,068.90 a troy ounce.Silver futures for December delivery rose 0.07% to $14.190 a troy ounce, while copper futures were flat at $2.075 a pound.Overnight, gold futures were relatively flat on Wednesday paring earlier gains in overnight Asian trading, as manufacturing activity in both China and the U.S. fell to its lowest level in years.Investors also awaited for a flurry of potential market-moving comments from members of the Federal Reserve, including chair Janet Yellen on Wednesday, for further indications on whether the U.S. central bank could raise short-term interest rates later this month. A rate hike is viewed as bearish for gold, which is not attached to interest rates and struggles to compete with high-yield bearing assets.Gold is coming off a dreadful month when it tumbled more than 8%, amid mounting expectations for the Fed's first rate hike in nearly a decade. Last week, the precious metal continued its extended slump when it plunged to fresh six-year lows around $1,050 an ounce.In the U.S., the picture was as grim as national factory activity contracted at its fastest pace in more than six years. In a monthly report, the Institute for Supply Management (ISM) said national factory activity fell to 48.6 in November, dropping below 50 for the first time since November, 2012. New orders fell sharply by four points from 52.9 to 48.9, its lowest level in more than three years.The Federal Open Market Committee is keeping a close eye on global economic data over the next few weeks before its critical monetary policy meeting on Dec. 15-16.Two members, Federal Reserve Bank of Chicago president Charles Evans and governor Lael Brainard are scheduled to speak on Tuesday before Yellen makes two appearances in Washington on Wednesday. The comments from the FOMC members will come ahead of the European Central Bank's meeting on Thursday when its Governing Council is expected to approve a wide range of easing measures, including increasing the scope of its comprehensive bond buying program.The expectation for diverging monetary policies from the Fed and the ECB sent the dollar soaring above 100.35 on Monday, mere percentage points from a 12-month high. While the U.S. Dollar Index slipped back into double digits on Tuesday morning, the index still remained near its highest level since mid-April. The index measures the strength of the greenback versus a basket of six other major currencies.