Gold flat as investors await cues from Fed minutes

GOLD prices were flat on Wednesday (Aug 17), as investors awaited the release of the minutes of the US Federal Reserve’s last policy meeting later in the day that could offer clues on further interest rate hikes.

Spot gold was flat at US$1,775.59 per ounce, as of 1.19 am GMT, after hitting its lowest since Aug 8 at US$1,770.86 on Tuesday.

US gold futures were steady at US$1,788.80 per ounce.

The dollar held steady after rising to a 3-week peak against its rivals on Tuesday, while benchmark US 10-year Treasury yields edged higher.

Market participants are awaiting the minutes of Fed’s Jul 26-27 policy meeting due at 6.00 pm GMT.

The US central bank has raised its benchmark overnight interest rate by 225 basis points since March to tame high inflation and is expected to raise its policy rate by another 50 or 75 basis points at its next meeting on Sep 20-21.

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

Data on Tuesday showed that US homebuilding fell to the lowest level in nearly 1-1/2 years in July, weighed down by higher mortgage rates and prices for construction materials.

Meanwhile, production at US factories increased more than expected last month, as output rose at motor vehicle plants and elsewhere, pointing to underlying strength in manufacturing despite ebbing business confidence.

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Gold extends fall on stronger dollar, Fed rate-hike worries

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.18 to 992.20 tonnes on Tuesday from 993.94 tonnes on Monday.

Spot silver was flat at US$20.12 per ounce, platinum eased 0.2 per cent to US$933.14, and palladium edged 0.1 per cent higher to US$2,155.19. REUTERS