Gold prices gain in Asia on technical rebound, BoJ ahead

Investing.com - Gold prices inched up in Asia on Thursday in a mild technical rebound as investors increasingly see the Federal Reserve raising rates in December.

On the Comex division of the New York Mercantile Exchange, Gold for December delivery rose 0.13% at $1,071.10 a troy ounce.

Silver futures for December delivery gained 0.04% to $14.135 a troy ounce, while copper for December delivery inched up 0.02% to $2.074 a pound.

The Bank of Japan will release its latest monetary policy views at 0330 GMT followed by a 0630 GMT press conference by Governor Haruhiko Kuroda. The central bank is expected to hold policy steady on asset buying, but may highlight risks to meeting its 2% sustained inflation target.

Overnight, gold futures remained near five-year lows on Wednesday, as a trio of policymakers from the Federal Reserve sent further indications that the U.S. Central Bank will raise short-term interest rates when it convenes next at a meeting in mid-December.

The minutes of the latest Federal Open Market Committee meeting showed Wednesday broad support for the decision to include a reference to the next meeting in the statement, though members generally agreed it was prudent to wait to raise rates until it had more information.

Appearing on a panel alongside New York Fed president William Dudley and Cleveland Fed president Loretta Mester, Atlanta Fed president Dennis Lockhart indicated that disruptions in the global financial markets have subsided enough for the Fed to strongly consider a rate hike in December. The Fed's benchmark Federal Funds Rate has remained at its current level between zero and 0.25% for nearly seven years since December, 2008.

"I am comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions," Lockhart said at the Clearing House Payments System Risk Symposium in New York. "I believe it will soon be appropriate to begin a new policy phase."

Mester reiterated her views that conditions in the economy have improved enough to handle a modest rate increase. While the president of the Federal Reserve of Cleveland does not own a vote at the December meeting, she will regain one in the Fed's next cycle.

Dudley, meanwhile, noted that he does not expect to see any unpredictable market reactions when the Fed eventually decides to normalize policy since the potential move has been so well-documented in recent weeks. The New York Fed has a number of tools at its disposal to help adjust the Fed Funds Rate once the decision is made.

The CME Group's (O:O:CME) Fed Watch increased the probability of a December rate hike by eight points to 72% on Wednesday following the remarks.

Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

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