Gold near one-month low as Yellen signals possible December rate hike

USA stocks on Wednesday fell after Yellen said a rate hike next month was still on the table.

The USA central bank took a calculated gamble last week when it specifically referenced its December policy meeting as a date of a possible liftoff and it had the desired effect: investors quickly rolled back bets that rates would stay near zero until next year.

Watch out savers, home buyers and investors: America’s interest rates could finally go up in December. The WIRP bond market probability of a December rate hike moved up to 58% from 52% the day previous.

“Price action is very bearish, but we expect to find initial support at the October low of $1,105 and the September low of $1,100”, Scotia Mocatta analysts said.

The USA dollar index jumped to a three-month high after Ms Yellen told a congressional hearing on financial regulation that the Fed’s upcoming December meeting was a “live possibility” for an interest rate hike. While it recovered 0.4 percent to $5,032.50 a ton, it was still set to end the week 1.6 percent lower, its third consecutive weekly loss.

It will likely join October’s strong services sector and auto sales data in supporting views that economic growth will regain momentum in the fourth quarter after braking sharply to a 1.5 percent annual pace the July-September period.

Friday’s nonfarm payrolls report is expected to show a gain of 177,000 jobs with unemployment holding at 5.1%, according to forecasts from economists polled.

The oil market rose on Friday but gains were limited by the global supply glut and after the US Federal Reserve hinted at a December interest rate hike.

The single currency tumbled 1.1 per cent to $1.0845, its weakest level in three and a half months. When asked directly about when rates will be going up, Yellen replied, “The committee does feel that moving in a timely fashion – if the data and the outlook justify such a move – is a prudent thing to do”, she said. Of course, a few analysts believe that Yellen’s Fed has already waited too long, and missed their best window for raising interest rates. Investors use fed funds futures to wager on central-bank policy moves.

Yellens remarks came a day after leading Republican presidential candidate Donald Trump asserted that the Fed has kept rates low as a political favor to President Barack Obama, a charge White House officials dismissed.

OIL: Benchmark USA crude futures rebounded, adding 19 cents to $46.51 per barrel in electronic trading on the New York Mercantile Exchange.