Gold edges lower as dollar gains on hawkish Fed minutes

[BENGALURU] Gold prices inched lower on Thursday (Apr 6) as the US dollar firmed after minutes of the Federal Reserve's March meeting indicated an aggressive stance to combat inflation, denting the safe-haven metal's appeal.

Spot gold was down 0.2 per cent at US$1,922.08 per ounce by 1.25 GMT. US gold futures rose 0.2 per cent to US$1,926.10.

The dollar hovered near a 2-year high against a basket of currencies after Fed minutes showed the central bank is preparing to move aggressively to head off inflation.

A stronger dollar makes gold less attractive for other currency holders.

"Many" Fed officials said they were prepared to raise rates in half-percentage-point increments incoming policy meetings to try to bring prices under control, even though the rising risks tied to the Ukraine war held them to the standard hike in March, according to the minutes, which were released on Wednesday.

Minutes from the European Central Bank's March meeting, due later in the day, are unlikely to include such hawkish plans, though they could offer insight into policymakers' delicate balancing act to manage soaring inflation and slowing growth.

The benchmark US 10-year Treasury yield hovered close to multi-year highs hit in the previous session, increasing the opportunity cost of holding non-yielding bullion.

The Perth Mint's sales of gold products in March soared 68 per cent to their highest in a year, the refiner said in a blog post on Wednesday, citing an increased appetite for the safe-haven metal following Russia's invasion of Ukraine.

Spot silver edged 0.2 per cent lower to US$24.38 per ounce, platinum shed 0.1 per cent to US$952.32 and palladium was up 0.5 per cent at US$2,208.87. REUTERS