Gold holds steady as investors eye Fed minutes

Gold prices remained steady on Wednesday, hovering above the key $2,400 level, as investors awaited the release of minutes from the Federal Reserve’s latest policy meeting, Reuters reported. The minutes are expected to offer clues about the timing of potential US interest rate cuts.

Spot gold held firm at $2,415.35 per ounce as of 03:45 GMT. This follows a record high of $2,449.89 reached earlier this week. However, US gold futures dipped slightly, down 0.3 per cent at $2,419.00.

Analysts attribute gold’s recent surge to fiat currency debasement by the US and other developed nations to address budget deficits. This could result in greater dependence on fiscal stimulus, undermining confidence in national currencies.

The release of the Fed’s May policy meeting minutes is scheduled for 18:00 GMT. Currently, markets are pricing in a 64 per cent chance of a rate cut by September.

While recent data suggests a potential slowdown in US inflation, Fed policymakers on Tuesday cautioned against rushing into rate cuts.

They emphasised the need for several more months of data to confirm inflation is truly on track to meet the central bank’s two per cent target.

Gold remains an appealing investment due to possible lower interest rates and geopolitical uncertainties. Tim Waterer, chief market analyst at KCM Trade, notes that gold has stabilised above $2,400 in anticipation of looser monetary policies.

However, achieving further record highs may depend on factors such as a weaker dollar, reduced bond yields, or increased safe-haven demand, Waterer added.

Spot silver dipped 0.8 per cent to $31.71 per ounce, following an over-11-year high earlier this week.

Analysts say silver’s recent price surge is due to its momentum-driven nature and catch-up play with gold prices.

Platinum prices edged up slightly by 0.1 per cent to $1,047.76, while palladium fell 0.7 per cent to $1,018.85.