Gold hardly changed as focus turns to Fed minutes

Bengaluru — Gold prices were flat on Wednesday as investors awaited minutes of the Federal Reserve's last policy meeting for fresh cues on when the US central bank will start cutting interest rates.

Spot gold was little changed at $2,331.97oz by 3.56am GMT. US gold futures gained 0.3% to $2,340.20.

The gold market had been steady and holding in a narrow range for a few weeks now, said Marex analyst Edward Meir, adding that bullion prices might move higher later this year with all these elections up in the air.

Ahead of the release of the Fed minutes at 6pm GMT, chair Jerome Powell said on Tuesday the US was back on a “disinflationary path”, but policymakers needed more data before cutting rates to verify that recent weaker inflation readings provided an accurate picture of the economy.

Next on investors’ radar are the ADP employment and weekly jobless claims data scheduled to be released later in the day, and the nonfarm payrolls (NFP) report due on Friday.

“The NFP release this week could shake things up [for the gold market] if we see a shift in rate-cut expectations,” said Tim Waterer, chief market analyst at KCM Trade.

Traders see a 67% chance of a Fed rate cut in September, according to CME FedWatch Tool.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

“There’s a clear path for gold to outperform from here, likely fuelled by Western flows. Conversely, in the event that central bank demand drops drastically, rates remain high for longer and Asian investor sentiment flips, we could see a pullback in the second half,” the World Gold Council said in its midyear outlook report.

Spot silver rose 0.4% to $29.63/oz and platinum climbed 0.7% to $997.85.

Palladium declined 0.7% to $1,014.64 after hitting a more than one-week high earlier.

Reuters