By Stephanie Yang and Katherine Dunn

Gold prices fell to an eight-month low Wednesday, weighed down by a rising U.S. dollar and expectations of an interest-rate increase in December.

Gold for December delivery was recently down 2% at $1,187.10 a troy ounce on the Comex division of the New York Mercantile Exchange, trading at its lowest level since Feb. 10.

The WSJ Dollar Index was recently up 0.6% at 91.87, trading at its highest since January. A strong U.S. currency makes dollar-denominated gold more expensive for foreign buyers.

Stronger-than-expected economic data Wednesday helped boost the dollar and supported the possibility ofan interest-rate increase at the next Federal Reserve policy meeting.

U.S. durable-goods orders rose 4.8% from a month earlier, the biggest jump in a year and a positive sign for factories and manufacturing.

"The stronger dollar, equities and higher U.S. rates continue to nudge the longs out of the market," said Peter Hug, global trading director at Kitco Metals, in a Wednesday note.

Investors will also be watching for the release of minutes from the Fed's November meeting, to gauge whether officials are set on raising rates in December. Higher rates tend to weigh on gold, which pays its holders nothing and struggles to compete with yield-bearing assets when borrowing costs rise.

Analysts expect few surprises from the Fed minutes, set to be released at 2 p.m. EST Wednesday.

"We don't think there's any doubt that the Fed will hike rates in December," said Simona Gambarini, a commodities economist at Capital Economics in London.

Traders noted that the shortened holiday week due to Thanksgiving may add to volatility in a market with fewer participants. As the holiday season nears, traders will likely become increasingly cautious, said Joni Teves, a strategist at UBS, in a note.

"Many [investors] are likely sidelined at this point, unwilling to take strong positions both in terms of size and time frame ahead of year-end, " said Ms. Teves.

Write to Stephanie Yang at stephanie.yang@wsj.com and Katherine Dunn at Katherine.Dunn@wsj.com

(END) Dow Jones Newswires

November 23, 2016 10:43 ET (15:43 GMT)

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