Gold under pressure after remarks by Atlanta Fed President

Gold under pressure after remarks by Atlanta Fed President

5 August 2015, 09:31

On Wednesday gold prices eased slightly in Asia trade after remarks from a Federal Reserve board voting member that a widely expected rate hike this year could be "close". 

A voting member this year, Atlanta Fed's Lockhart is considered to be a moderate, analysts said, which made his remarks more meaningful.

Comex gold for December delivery fell 0.11% to $1,086.30 a troy ounce.

Silver for September delivery fell 0.14% to $14.545 a troy ounce.

Copper was also lower despite recovery in the Chinese stock markets. Copper for September delivery lost 0.05% to $2.351 a pound.

Talking with the Wall Street Journal, Atlanta U.S. Federal Reserve Bank President Dennis Lockhart said the Fed was "close" to being ready to raise short-term rates.

Lockhart noted it would take major weakness in the data to convince him not to move.

"I think there is a high bar right now to not acting, speaking for myself," he said. The Atlanta Fed president is a voting member on rate policy this year. He is seen by Fed watchers as a key bellwether of the thinking of the majority on the U.S. central bank due to his pragmatic approach to economic issues. Lockhart is the second Fed official in as many days to come out in favor of a rate liftoff next month. St. Louis Fed President James Bullard said in a WSJ interview released on Monday that he was in favor of a move after the Sept. 16-17 meeting.

A rate liftoff is viewed as bearish for commodities, and the metals sector in particular, which is unattached to interest rates and struggles to compete with high-yield bearing assets in rising rate atmosphere.

The Shanghai Composite Index added more than 3% on Tuesday as a flurry of late trading doubled previous gains on the session. This, along with the weaker dollar, boosted the metals. Chinese equities recovered after regulators clamped down on short selling in an effort to trim volatility in the domestic stock markets.

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