TLDR:
- Spot gold fell 0.8% to $4,130.37 per ounce as the US dollar index rose 0.3% during Wednesday trading.
- Traders still price in an 88% chance of a Fed rate hike by December, per the CME FedWatch tool.
- China’s central bank extended its gold buying streak to a 23rd consecutive month in September.
- LBMA conference delegates forecast gold could reach $5,013 per ounce over the next 12 months.
Gold prices slipped on Wednesday as the US dollar strengthened ahead of the Federal Reserve’s September meeting minutes.
Spot gold fell 0.8% to $4,130.37 per ounce by 0627 GMT. US gold futures also dropped 0.7% to $4,157.00. Investors are waiting for clues on whether policymakers remain inclined to raise rates further.
Meanwhile, the US dollar index rose 0.3% during the session. This made greenback-priced metals more expensive for investors holding other currencies.
Fed Minutes and Rate Hike Expectations
The Federal Open Market Committee is due to release its latest meeting minutes later in the day. The document may show how much support exists among policymakers for further rate increases.
Frank Walbaum, a market analyst at Naga.com, shared his outlook for the metal. “The yellow metal is likely to remain relatively stable with a mild downside bias,” he said.
Walbaum added that the minutes “could reshape upcoming hike odds.” Moreover, long-term Treasury yields, the dollar, and oil prices could amplify the effect. Middle East developments could influence oil prices.
Recent comments from Fed officials point to a firm stance on inflation. San Francisco Fed President Mary Daly said further hikes depend on whether inflation drivers fade or persist. Kansas City Fed President Jeff Schmid said rates still need to rise further.
However, soft economic data have dampened expectations of an October rate increase. Even so, traders price in an 88% chance of a hike by December, according to the CME’s FedWatch tool. High interest rates typically push investors toward yield-generating assets over gold.
Central Bank Buying and Other Metals
China’s central bank stepped up its gold purchases in September. Official data showed the buying streak extended to a 23rd consecutive month.
Separately, delegates at the London Bullion Market Association’s annual conference in Sorrento, Italy, shared a forecast for gold prices. They said gold could reach $5,013 an ounce over the next 12 months.
Other precious metals also declined alongside gold prices during the session. Spot silver fell 1.9% to $60.54 per ounce, while platinum eased 1.3% to $1,679.20. Palladium lost 1.5% to $1,154.35.
Platinum and palladium each dropped more than 1% on the day. Market participants will now watch the Fed minutes for any change in rate hike odds. The release is due later on Wednesday, and gold prices remain in focus.
The post Gold Prices Dip as US Dollar Gains Ahead of Fed Policy Minutes appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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