BENGALURU- Gold prices were subdued on Wednesday as investors strapped in for minutes from the Federal Reserve’s latest policy meeting for insights into the US central bank’s interest rate trajectory.
Spot gold held its ground at $2,619.75 per ounce, after hitting a two-week low in the previous session. Prices scaled a record high of $2,685.42 on Sept. 26.
US gold futures edged 0.1 percent higher to $2,638.20.
The dollar index witnessed a sharp rally to a seven-week high last week. A stronger dollar makes bullion less attractive to other currency holders.
“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,” said Matt Simpson, senior analyst at City Index.
Minutes from the Fed’s September policy meeting are due at 1800 GMT. Traders are also keeping a keen eye on the US Consumer Price Index (CPI) report on Thursday and the Producer Price Index (PPI) data on Friday.
“Gold prices could get a nice bump if CPI comes in soft, but whether it can reach a new high this year requires US data in general to underperform,” Simpson added.
The CME FedWatch tool shows that markets no longer expect a 50-basis-point cut next month, following last week’s strong jobs report. They now see an 89 percent chance for a 25-basis-point reduction.
