Gold prices retreated but hovered above the key $2,400 level during trading on Wednesday, as investors awaited the minutes of the Federal Reserve's latest policy meeting for fresh signals on the timing of a U.S. interest rate cut.
One factor supporting gold is the devaluation of paper currencies by the United States and developed countries due to high budget deficits, said Kelvin Wong, chief market analyst for Asia-Pacific at OAND.
The minutes of the Federal Reserve’s May policy meeting are due at 21:00 Saudi time. Traders are currently pricing in a 64% chance of a rate cut by September.
Recent data suggested that U.S. inflation has resumed its downward trend, but Federal Reserve policymakers said Tuesday that the central bank should wait several more months to ensure inflation is actually back on track to its 2% target before cutting interest rates. Low interest rates and geopolitical uncertainty make bullion a good investment.
“Gold has been rallying above $2,400 ahead of the start of rate cuts later in the year, but to reach record highs it may require a weaker dollar or bond yields, or increased safe-haven demand,” said Tim Waterer, chief market analyst at KCM Trade.
Gold at settlement yesterday
Gold futures prices fell during trading yesterday, Tuesday, amid anticipation of the issuance of economic reports, amid investors’ profit-taking operations, to benefit from the gains of the yellow metal after it achieved record levels.
At settlement, June gold futures fell 0.5%, or $12.6, to $2,425.90 an ounce, following two straight sessions of gains. Gold and the Dollar Now
Gold futures are now down 0.24% at $2,420 an ounce.
While spot gold contracts fell by about 0.19% to $2,416 per ounce.
On the other hand, the dollar index fell by about 0.04% to 104.520 points.
Other minerals
Spot silver fell 0.8 percent to $31.70 after hitting its highest level in more than 11 years on Monday.
Platinum rose 0.3 percent to $1,049.55 and palladium fell 0.8 percent to $1,017.73.
