Gold slips as dollar firms, Fed minutes loom
Shafaq News
Gold prices slipped on Wednesday as the US dollar strengthened, while investors awaited minutes from the Federal Reserve's September meeting for clues on whether policymakers remain inclined to raise rates further.
Spot gold fell 0.8% to $4,130.37 per ounce by 0627 GMT. US gold futures dropped 0.7% to $4,157.00.
The US dollar index rose 0.3%, making greenback-priced metals more expensive for investors holding other currencies.
Minutes of the latest Federal Open Market Committee meeting are due later in the day.
"The yellow metal is likely to remain relatively stable with a mild downside bias," said Frank Walbaum, a market analyst at Naga.com.
"Minutes will clarify the Fed's monetary policy and the degree of support among policymakers for further rate increases and could reshape upcoming hike odds. Subsequent moves in long-term Treasury yields, the dollar, or oil prices triggered by any Middle East developments would then amplify the directional impact (on gold)," Walbaum said.
Recent comments from Fed officials underscored the US central bank's commitment to bringing inflation under control.
San Francisco Fed President Mary Daly said whether further rate hikes are needed depends largely on if the factors pushing up inflation fade or persist, while Kansas City Fed President Jeff Schmid said rates still need to rise further to bring inflation down.
While recent soft economic data have dampened expectations of an October rate increase, traders are still pricing in an 88% chance of a hike by December, according to the CME's FedWatch tool.
In a high-interest-rate environment, investors tend to favour yield-generating assets over gold.
Separately, delegates attending the London Bullion Market Association's annual conference in Sorrento, Italy, forecast that gold could reach $5,013 an ounce over the next 12 months.
China's central bank stepped up its gold purchases in September, extending its buying streak to a 23rd consecutive month, official data showed.
Spot silver fell 1.9% to $60.54, platinum eased 1.3% to $1,679.20, and palladium lost 1.5% to $1,154.35.
(REUTERS)
Only the headline is edited by Shafaq News.
