Gold inches lower after US Fed meeting minutes

GOLD prices ticked lower on Thursday (Feb 23) after minutes from the Federal Reserve’s latest policy meeting indicated that the US central bank would likely keep interest rates higher for longer to check high inflation.

Spot gold was down 0.1 per cent at US$1,823.69 per ounce, as of 0039 GMT. US gold futures slipped 0.5 per cent to US$1,833.10.

Minutes from the Fed’s Jan 31-Feb 1 policy meeting released on Wednesday showed policymakers agreed rates would need to move higher, but that the shift to smaller-sized hikes would let them calibrate more closely with incoming data.

Bullion is seen as a hedge against inflation, but rising interest rates dull the non-yielding asset’s appeal.

Traders of Fed funds futures expect benchmark rates to peak at 5.362 per cent in July and remain above 5 per cent through the year.

New York Federal Reserve Bank president John Williams said on Wednesday the US central bank is “absolutely” committed to bringing inflation back down to its 2 per cent target over the next few years, by bringing demand down in line with constrained supply.

St Louis Fed president James Bullard on Wednesday repeated his view that a Fed policy rate in the range of 5.25 per cent to 5.5 per cent would be adequate to bring inflation down to the Fed’s 2 per cent target.

The dollar index was steady, making greenback-priced bullion more expensive for buyers holding other currencies.

Benchmark 10-year note yields slipped from a three-month peak hit on Wednesday.

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Gold ticks higher with focus on Fed meeting minutes

Spot silver was little changed at US$21.51 per ounce, platinum fell 0.3 per cent to US$945.84 and palladium edged 0.2 per cent lower to US$1,479.59. REUTERS