Gold prices inched higher on Wednesday as
the US dollar pulled back, with investors awaiting minutes
from the Federal Reserve’s last policy meeting that could offer
clues on further interest rate hikes.
Spot gold rose 0.2% to $1,778.53 per ounce, as of
0511 GMT, after hitting its lowest since Aug. 8 at $1,770.86 on
US gold futures gained 0.2% to $1,793.20.
The dollar slipped 0.1% against its rivals, making
gold less expensive for other currency holders.
“Focus is on minutes from the July Federal Open Market
Committee meeting and the Jackson Hole Symposium on Aug. 25-27.
Both these events will set the stage for Fed meeting in
September,” said Ilya Spivak, a currency strategist at DailyFX.
“If we are going to get a more hawkish view from the Fed on
rate hikes, that’s going to be somewhat negative for gold in
terms of its core appeal for investors.”
The minutes of the Fed’s July 26-27 policy meeting are due
at 1800 GMT.
The US central bank has raised its benchmark overnight
interest rate by 225 basis points in total since March to tame
Traders were pricing in around a 42.5% chance of a
75-basis-point rate hike and a 57.5% chance of a 50-bp increase
at the Fed’s next meeting on Sept. 20-21.
Although gold is seen as a hedge against inflation, rising
US interest rates dull non-yielding bullion’s appeal.
Despite signs of easing inflation in the world’s largest
economy, Fed officials have maintained a hawkish tone on future
rate hikes that has led to a pullback in gold prices from the
key $1,800 level.
Holdings of SPDR Gold Trust , the world’s largest
gold-backed exchange-traded fund, fell 0.18% to 992.20 tonnes on
Tuesday, its lowest since January.
Elsewhere, spot silver rose 0.3% to $20.17 per ounce,
platinum gained 0.2% to $936.55, and palladium
climbed 0.3% to $2,159.82.
(Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi
Aich and Subhranshu Sahu)