Gold price down following Federal Reserve minutes

Gold price down following Federal Reserve minutes
Gold price down following Federal Reserve minutes

Gold prices fell for a third straight time Thursday after minutes from the Federal Reserve’s latest meeting indicated some officials were inclined to raise interest rates.

Spot gold fell 0.3% to $2,370.74 an ounce, by 0335 GMT, after falling more than 1% in the previous session. Bullion hit a record high of $2,449.89 on Monday.

U.S. gold futures were down 0.8% at $2,373.00.

While the policy response for now would involve keeping the U.S. central bank’s benchmark rate at its current level, the minutes released Wednesday also reflected discussions of possible further hikes.

“Gold took a hit after the Fed minutes reminded investors that interest rate cuts are far from imminent,” said Tim Waterer, chief market analyst at KCM Trade.

Bullion is known to be a hedge against inflation, but rising interest rates increase the opportunity cost of holding gold without yield.

“It is possible that gold could return to support levels around $2,355 if the dollar continues to rise,” Waterer said, adding that the medium to long term outlook still looks positive for gold, but that much depends on the Fed’s next interest rate decision, which should be lower rather than higher.

Traders’ bets showed growing doubt that the Fed will cut rates more than once in 2024, currently estimating a 73% chance of a rate cut by November.

India’s gold imports in 2024 could fall by almost a fifth from the previous year as record prices prompt consumers to trade in their old jewelry for new items, the gold trade chief said. an industry body at Reuters.

Spot silver was down 0.8% at $30.52, platinum was down 0.2% at $1,032.54 and palladium was down 1.1% at $988.25.

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