Gold edges lower as China markets return from holidays; Fed minutes on tap

Gold prices dipped on Thursday as Chinese markets came back to work after holidays while market players were awaiting Fed minutes from September meeting later in the day.

Comex gold for December delivery fell 0.48% to $1,143.20, while December silver futures dropped 2.67% to $15.665 a troy ounce.

Copper for December delivery fell 1.76% to $2.325 a pound.

In China, trading resumed after a multi-day holiday break. The Shanghai Composite Index was last up 2.97% to 3,292.29.

However, those gains withered in comparison to gains for the Hang Seng China Enterprises Index over the last several days during the China markets’ closure for a holiday in the past days, said Angus Nicholson, market analyst at IG. “Given the HSCEI rallied 11.5% in that time, for mainland shares only to rise 3%-4% since their last close is pretty disappointing,” he said in an emailed response to a question.

Investors await the release of the minutes from the Fed's September meeting due later in the day for further hints on whether the U.S. central bank could raise short-term interest rates before the end of the year. A rate increase is considered to be bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.

At the September meeting, the FOMC voted to leave its benchmark Federal Funds Rate at its current level between zero and 0.25%, marking the 55th consecutive meeting it decided to stand pat on the policy of a near-zero level.

One member of the FOMC Richmond Fed president Jeffrey Lacker voted for an increase of 0.25%, and four others felt that the Fed should wait until 2016. In June, by comparison, only two FOMC members were in favor of postponing a rate hike until next year.

While the FOMC signaled that it had seen significant improvements in the U.S. economy since it last met in July, it also expressed concern that significant headwinds from weakness in China and the global economy overall could restrain domestic growth.

Following the meeting, Fed chair Janet Yellen said it was likely the FOMC could increase rates by the end of the year barring unforeseen events over the next several weeks. Last week, though, a dismal U.S. jobs report for September could have planted seeds of doubt among FOMC members whether a rate hike this year should be appropriate.

On Tuesday, San Francisco Fed president John Williams repeated that he still believes the FOMC will raise rates in 2015. Even so, Williams expects the pace of rate hikes to be the "most gradual tightening cycle in the history of the Fed."