Investing.com - Gold prices remained lower on Wednesday, as the U.S. dollar was still broadly supported by speculation over the next head of the Federal Reserve, shrugging off disappointing U.S. housing sector data.
Comex gold futures were down $4.75 or about 0.37% at $1,281.45 a troy ounce by 08:40 a.m. ET (12:40 GMT), their lowest since October 9.
The U.S. Commerce Department reported on Wednesday that the number of housing starts and building permits slumped more than expected in September, dampening optimism over the health of the U.S. housing sector.
But the greenback remained supported following reports on Monday that U.S. President Donald Trump was favoring Stanford economist John Taylor to replace Federal Reserve Chair Janet Yellen next year. Taylor is seen as more hawkish than current Yellen.
Trump is expected to meet with Yellen later in the week as part of his search for a new candidate for her position.
Market participants are also keeping an eye on current Fed Governor Jerome Powell and former Fed official Kevin Warsh as potential candidates to succeed Yellen when her term ends in February.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.13% at 93.47, just off a one-and-a-half week high of 93.64 hit earlier in the session.
Gold is sensitive to moves in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. interest rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere on the Comex, silver futures dropped 0.42% to $16.97 a troy ounce.
Meanwhile, copper futures slipped 0.11% to $3.193 a pound. Prices of the red metal rallied to their best level since August 2014 at the start of the week, boosted by robust economic data from China, the world's top user of the red metal.
Investors looked to China's Party Congress for signs on future policy direction in the world's second-largest economy. This political meeting, which takes place once every five years, has a mandate of approving new policies as well as appointing to certain positions those individuals who will lead the Asian nation over the next five years.