Gold flat as investors brace for Fed minutes

Bengaluru — Gold prices were flat on Wednesday, as investors held back from making big bets ahead of the US Federal Reserve’s latest policy meeting minutes, which could offer clues on further interest rate hikes.

Spot gold was flat at $1,740.23 per ounce by 3.06am GMT. US gold futures were also unchanged at $1,740.50.

“There is some nervousness in the market ahead of the Fed minutes,” said Edward Meir, an analyst with ED&F Man Capital Markets.

The minutes of Fed’s November 1-2 policy meeting are due at 19pm GMT. US durable goods data and weekly initial jobless claims are also on the radar.

At the beginning of this month, the US central bank delivered a fourth consecutive 75-basis-point (bps) rate hike to tame inflation in what has become the fastest tightening of monetary policy in 40 years.

The Fed may need to raise interest rates to a higher level and hold them there for longer to successfully moderate consumer demand and bring down high inflation, Kansas City Fed President Esther George said on Tuesday.

Though gold is seen as a hedge against inflation, rising US interest rates dull non-yielding bullion’s appeal.

“In the near term, expect gold prices to work a bit higher from here into year-end, because I see the dollar weakening some more and we are very close to peaking out on inflation and interest rates,” Meir said.

Fed fund futures are now pricing in a 79% chance of 50 bps hike in the December meeting.

Gold may bounce into a range of $1,751-$1,756 per ounce, before falling again, according to Reuters technical analyst Wang Tao.

Spot silver was little changed at $21.07 per ounce, while platinum and palladium were flat at $990.70 and $1,860.89, respectively.