October 25, 2016 / 1:11 AM / 3 years ago

PRECIOUS-Gold subdued on likelihood of Fed rate hike

Oct 25 (Reuters) - Gold prices edged slightly lower early on
Tuesday as the U.S. dollar gained on increasing expectations of
a December interest rate hike by the Federal Reserve.
 
    FUNDAMENTALS
    * Spot gold was trading down 0.1 percent at $1262.76
an ounce at 0058 GMT.
    * U.S. gold futures eased nearly 0.1 percent at
$1263 an ounce. 
    * The dollar held near nine-month highs against a basket of
major currencies on Tuesday as solid U.S. manufacturing activity
and comments from a Federal Reserve official cemented
expectations of a U.S. rate hike by year-end. 
    * The U.S. central bank will raise its policy rate three
more times by the end of next year, Chicago Fed President
Charles Evans, one of the Federal Reserve's most vocal policy
doves, said on Monday. 
    * The dollar index, which measures the greenback
against a basket of currencies, was up about 0.1 percent at
98.808.
    * Asian shares edged higher on Tuesday as upbeat U.S.
earnings boosted Wall Street and factory surveys in the United
States and Europe boasted their best readings so far this year.
 
    * The Markit survey of U.S. manufacturing climbed to a
one-year top of 53.2. 
    * The outlook for euro zone inflation still hangs in the
balance, European Central Bank rate setter Ardo Hansson said on
Monday, adding that it was too early to discuss a possible
extension of the ECB's money-printing programme. 
    * Business activity in the euro zone has expanded at the
fastest pace this year so far in October, as a buoyant Germany
offset the impact from firms raising prices at the sharpest rate
in more than five years, a survey showed. 
    * Goldman Sachs said it remains broadly neutral on outlook
for gold through year-end 
    * For the top stories on metals and other news, click
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     DATA/EVENT AHEAD (GMT)
     0800   Germany  IFO business climate index   Oct 
     1300   U.S.     Home price index             Aug 
     1400   U.S.     Consumer confidence index    Oct 

 (Reporting by Apeksha Nair in Bengaluru; Editing by Richard
Pullin)
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