Gold prices were mostly flat today as investors were idle ahead of tomorrow’s release of the Federal Open Market Committee (FOMC) minutes.
Gold for December delivery on the Comex division of the New York Mercantile Exchange fell $1.50 to close at $1,116.90 per pounce. Trade ranged from $1,108.50 to $1,120.40.
The minutes from the July FOMC meeting are due for release tomorrow and could provide some final clues ahead of the Fed’s highly anticipated September meeting.
Currently, the probability of a September rate hike stands at 36 percent, according to the CME Group Fedwatch – a tool that gauges the market’s view on the likelihood of a change in US monetary policy.
“Citi strategists see continued strength for the dollar as the Fed begins tightening,” Citi Research said. “If this appreciation manifests, then we are likely to be in for more pain in gold markets even after the first hike takes place.”
Turning to currency news, the People’s Bank of China (PBoC) lowered the reference slightly of the yuan to 6.3966 from 6.3939. The ongoing devaluation to the dollar is leading investors to selloff Chinese positions.
Overnight, the Shanghai Composite Index fell 6.2 percent to 3,748.16.
In data, Chinese new home prices fell by 3.7 percent in July from the previous year. However, the decline didn’t match June’s 4.9 percent dip. New home prices climbed in 31 out of the 70 cities monitored, up from 27 previously.
Meanwhile in the US, building permits in July gained 1.12 million, below the forecast of 1.23 million, while housing starts in July were at 1.21 million, above consensus of 1.19 million.
For the year, housing starts are up 10.1 percent from the same period in 2014.
In US equities, the Dow Jones industrial average and S&P were down 0.1 percent and 0.2 percent respectively, while the dollar was 0.4 percent stronger at $1.1029 against the euro.
As for the other precious metals, Comex silver for September delivery was last down 48.3 cents at $14.815 per ounce. Trade has ranged from $14.680 to $15.325.
Platinum for October delivery on the Nymex fell $7.0 at $993.70 per ounce, while the most-actively traded palladium contract was at $596.55 per ounce, down $17.25.
(Editing by Tom Jennemann)
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