Gold subdued on likelihood of Fed rate hike
(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.
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 to 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.