Global gold prices fell during these moments of trading, today, Wednesday, as investors await the minutes of the latest monetary policy meeting of the US Federal Reserve to learn more about the path of interest rates at the US central bank.

Gold prices fell as the dollar index hit a seven-week high last week. A stronger dollar makes bullion less attractive to holders of other currencies.

“Gold prices look like they are in for a much-needed correction,” said Matt Simpson, senior analyst at City Index. “But I suspect buyers are lurking and keen to take advantage of a good opportunity – so I don’t expect a major sell-off.”

The minutes of the Federal Reserve's September monetary policy meeting are due at 21:00 Riyadh time. Traders are also closely watching the US CPI report on Thursday and the PPI data on Friday.

Simpson said in this context that gold prices could rise significantly if the consumer price index comes out weak, but to rise to a new high level this year requires weaker performance than the US data in general.

The US interest rate tracker available on Investing Saudi Arabia shows that markets no longer expect a 50 basis point cut next month, following last week’s strong jobs report. They now see an 87% chance of a 25 basis point cut.

Boston Federal Reserve President Susan Collins said Tuesday that weak inflation trends give the U.S. central bank room to implement further interest rate cuts.

Zero-yield bullion tends to thrive in a low interest rate environment.

Gold exchange-traded funds (ETFs) saw inflows for the fifth straight month in September, with North American-listed funds seeing more inflows, the World Gold Council said.

Gold at settlement yesterday

Gold futures prices deepened losses during trading on Tuesday, as investors awaited the release of inflation data in the United States this week, after markets ruled out a 50 basis point interest rate cut in November.

At the close of trading, December gold futures fell 1.15%, or $30.6, to $2,635.40 per ounce, the deepest decline for the yellow metal since August 30 (1.3%).

Gold and dollar now

Spot gold is now down 0.38% at $2,612 an ounce, after hitting a more than two-week low in the previous session. Prices hit a record high of $2,685.42 on September 26.

While US gold futures fell 0.19% to $2,630.

On the other hand, the dollar index contracts rose by 0.07% to 102.37 points.

Other minerals

Silver lost 0.1% to $30.68 an ounce. Platinum rose 0.5% to $955.10 and palladium gained 0.3% to $1,024.50.