scorecardresearchGold subdued as traders strap in for Fed minutes

Gold subdued as traders strap in for Fed minutes

Updated: 23 Nov 2022, 07:16 PM IST
TL;DR.

  • Spot gold was 0.2% lower at $1,736.65 per ounce by 1300 GMT, while U.S. gold futures eased 0.1% to $1,737.50.

(FILES) This file photo taken on August 5, 2020 shows gold bullion bars after being inspected and polished at the ABC Refinery in Sydney.  (Photo by DAVID GRAY / AFP)

(FILES) This file photo taken on August 5, 2020 shows gold bullion bars after being inspected and polished at the ABC Refinery in Sydney.  (Photo by DAVID GRAY / AFP)

(Reuters) - Gold edged lower on Wednesday with most investors on the sidelines ahead of minutes from the U.S. Federal Reserve's November policy meeting that could offer hints on its tightening path.

Spot gold was 0.2% lower at $1,736.65 per ounce by 1300 GMT, while U.S. gold futures eased 0.1% to $1,737.50.

"There's a general lack of interest really, ahead of the release of tonight's Fed minutes. There's nothing significant acting as a driver for the gold price," said Michael Hewson, chief markets analyst at CMC Markets. There's "fairly decent support" for prices around $1,730, he added.

Apart from the Fed minutes at 1900 GMT, investors also awaited U.S. durable goods data and weekly initial jobless claims data later in the day.

The U.S. central bank is widely expected to deliver a 50-basis point hike at its December meeting, with rates expected to peak in June.

"Gold has found itself driven for much of the year by the actions of the Fed and the comments by its officials so investors will be poring over every word of these minutes to determine the likely trajectory of the Fed's rate curve over coming months," Kinesis Money analyst Rupert Rowling said in a note.

Kansas City Fed President Esther George said on Tuesday the Fed may need to raise interest rates to a higher level and hold them there for longer to rein in high inflation.

If the global economy continues to struggle, it's unlikely the Fed will be able to tighten its monetary policy anywhere near as much as markets think, which should support gold because "eventually yields probably won't have much further to go on the upside", CMC's Hewson said. [US/]

Higher rates increase the opportunity cost of holding non-yielding gold.

Silver rose 0.3% to $21.14 per ounce, platinum was little changed at $990.38 and palladium added 1.1% to $1,879.88.

 

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First Published: 23 Nov 2022, 07:16 PM IST