Gold prices down in Asia as BoJ July minutes noted, U.S. debate ahead

Investing.com - Gold drifted weaker in Asia on Tuesday as minutes from the Bank of Japan's July meeting showed an easing push and investors awaited the outcome of a debate between the two main candidates for president in the U.S.

Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.21% to $1,341.25 a troy ounce.

Overnight, gold prices swung between small gains and losses during North America's session on Monday, remaining near a two-week high as investors' attention turned from central banks to American politics ahead of the first U.S. presidential debate.

With just around six weeks to go until the November 8 U.S. presidential election, the market will turn its attention to the first of three televised U.S. presidential debates Monday night.

The 90-minute debate will begin at 9:00PM ET (01:00 GMT on Tuesday) at Hofstra University in New York, with Lester Holt of NBC News as moderator.

Market participants are mostly expecting Democratic candidate Hillary Clinton to win the presidency and have not factored in the implications of a victory for Donald Trump. The idea of Trump in the White House is a worrying one for some investors who balk at his populist, unpredictable style.

Recent polls have shown a tightening race, with Clinton's once-comfortable lead narrowing sharply. The latest Reuters/Ipsos poll gives Clinton a 4-point lead, 41% to Trump's 37%, among likely voters.

The yellow metal notched a weekly gain of $31.50, or 2.34%, last week, the best performance in almost two months, after the Federal Reserve held off on raising interest rates and scaled back the number of rate hikes it expects next year.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

The Fed has policy meetings scheduled in early November and mid-December. Economists believe policymakers would avoid a rate hike in November in part because the meeting falls just days before the U.S. presidential election. Markets are currently pricing in just a 10.3% chance of a rate hike at November's meeting, according to Investing.com's Fed Rate Monitor Tool .

In the week ahead, market players will be focusing on fresh comments from Fed Chair Janet Yellen amid ongoing uncertainty over the timing of the next U.S. rate hike.

Besides Yellen, the economic calendar is packed with Fed speakers, as well as key data such as durable goods for August on Wednesday and personal income and spending data Friday. There is also a final revision to second-quarter GDP Thursday.

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