Gold prices remained subdued as investors await the Federal Reserve’s meeting minutes for interest rate insights. U.S. CPI and PPI reports are also anticipated to impact market movements.
Bollywoodfever: Gold prices were relatively stable on Wednesday as investors awaited the release of the Federal Reserve’s September policy meeting minutes, which could provide insights into the central bank’s interest rate outlook. Spot gold held at $2,619.75 per ounce by 0255 GMT, following a two-week low in the previous session. U.S. gold futures inched up by 0.1% to $2,638.20.
Last month, gold prices hit a record high of $2,685.42 on September 26. However, a rally in the U.S. dollar index to a seven-week high has recently weighed on the precious metal, as a stronger dollar makes gold less attractive to holders of other currencies.
“Gold prices seem to be seeing a much-needed retracement lower. But I suspect buyers are lurking and keen to snap up a bargain – so I’m not expecting a significant sell-off,” commented Matt Simpson, senior analyst at City Index.
Investors are also closely monitoring upcoming U.S. economic data, including the Consumer Price Index (CPI) report on Thursday and Producer Price Index (PPI) data on Friday. A softer CPI could give gold prices a boost, but a new high this year would depend on continued underperformance of U.S. economic data, Simpson added.
The CME FedWatch tool indicates an 89% chance of a 25-basis-point reduction in interest rates, following last week’s strong jobs report. Boston Fed President Susan Collins suggested that weakening inflation trends could support further rate cuts.
Gold tends to perform well in a low interest rate environment, and exchange-traded funds (ETFs) saw their fifth consecutive month of inflows in September, according to the World Gold Council.
In other precious metals, spot silver dipped 0.3% to $30.62, platinum gained 0.4% to $953.90, and palladium dropped 0.3% to $1,018.04.
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