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The dollar stood near a two-month peak against a basket of currencies on Wednesday after robust U.S. housing data supported the case for the Fed to raise rates in the near term.

Further interest rate hikes by the U.S. central bank will be "good news" for the world because they will show its largest economy is in good health, though they could pose a challenge for emerging markets, European Central Bank Vice President Vitor Constancio said on Tuesday.

New U.S. single-family home sales recorded their biggest gain in 24 years in April, touching a more than eight-year high as purchases increased broadly, a sign of growing confidence in the economy's prospects.

Gold futures added to overnight losses in European trade on Wednesday, falling to a seven-week low as investors continued to factor in an increased chance of a near-term U.S. interest rate rise.

Odds of a Fed rate hike for June stood at nearly 40% Wednesday morning, up from 30% a day earlier and compared to just 4% a week ago, according to futures markets. July odds were at about 60%.

Market players will pay close attention to comments from a number of Fed officials later in the day for further hints on the timing of a U.S. rate hike.

Philadelphia Fed President Patrick Harker speaks on the economy at an event in Philadelphia at 13:00GMT, or 9:00AM ET. Minneapolis Fed President Neel Kashkari is due to deliver comments at the Williston Basin Petroleum Conference in North Dakota at 15:40GMT, or 11:40AM ET, while Dallas Fed President Rob Kaplan speaks in Houston at 18:00GMT, or 2:00PM ET.

"I think gold prices will touch the $1,200 level in the coming few days. The change in rate hike expectations is still the major theme, but after the end of June the overall sentiment on the rate hike will be pretty much done," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

Reference: Reuters, Investing