Gold hovers near one-month lows as Yellen reiterates December hike possible

Gold held near one-month lows on Thursday and looked likely to slide below the $1,100-an-ounce level, after Federal Reserve Chair Janet Yellen bolstered market expectations for a U.S. interest rate hike in December.

On Thursday December Comex gold added 0.23% to trade at $1,108.70 an ounce. A day earlier, gold prices fell to $1,105.60, the lowest since September 15, after Yellen's remarks.

December Comex silver lost 0.19% to settle at %15.025 an ounce, while copper for December delivery dipped 1.54% to settle at $2.287 a pound.

Testifying before the House Financial Services Committee, Fed Chair Yellen described the U.S. economy as "performing well" and an interest rate hike in December as a "live possibility" if the economy stays on track. Low unemployment, continued growth and faith in a coming return of inflation means the country is ready for higher interest rates.

Another Fed official voiced similar opinions.

New York Fed President William Dudley said Wednesday that he agrees with Janet Yellen that a December rate increase is a live possibility. "I completely agree with Chair Yellen...it is a live possibility, but let's see what the data shows," Dudley said at a press briefing. Dudley added he will have more to say about the economic outlook next Thursday in a speech to the Economic Club of New York.

These comments caused investors to reset their expectations of a December rate hike above 60%.

"We think that a December rate hike is more likely than not and an appropriate market reaction is a lightening up of risk, weaker commodities, higher yields and a firmer dollar," ANZ said in a note.

"Bullion weakened after perceivably hawkish monetary policy comments by ... Yellen," said HSBC analyst James Steel. "The next focus for the gold market may shift to the upcoming release of nonfarm payrolls data on Nov 6."