JOIN USGold prices trade in narrow range as investors await Federal Reserve minutes and inflation data
Gold prices traded in a narrow range on Wednesday as investors looked for more clues on the pace of US monetary tightening from Federal Reserve minutes and inflation data due this week. Spot gold fell 0.1 per cent to $1,662.98 per ounce, as of 0343 GMT, hovering close to a one-week low touched on Tuesday. US gold futures were down 0.9 per cent at $1,671.00.
Investors are awaiting the release of minutes from the Fed's September meeting, at 1800 GMT. Focus is also on the inflation reading due on Thursday, which could shine some light on the Fed's rate-hike trajectory.
"Gold prices seem to be consolidating. There is a pause in the market ahead of major event risks, with Fed minutes and CPI report due," said Ilya Spivak, a currency strategist at DailyFX. "The more aggressive the Fed is, the less attractive gold looks. Market expects the minutes to just confirm the Fed's appetite for tightening."
Gold is considered an inflation hedge but rising interest rates reduce the non-yielding bullion's appeal.
Federal Reserve Bank of Cleveland President Loretta Mester said even with a large amount of rate rises this year, the central bank has yet to get surging inflation under control and will need to press forward with tightening monetary policy. The International Monetary Fund warned that colliding pressures from inflation, war-driven energy and food crises and sharply higher interest rates were pushing the world to the brink of recession.
On the physical front, Standard Chartered said in a note that with festival-wedding buying starting in India, demand would continue to firm, but was not expected to be as strong as in the fourth quarter of 2021.
Spot silver fell 0.7 per cent to $19.05 per ounce, platinum rose 0.1 per cent to $886.43 and palladium gained 0.3 per cent to $2,146.47.