Gold inches lower, investors wait for US Fed’s June meeting minutes

GOLD prices edged slightly lower in early Asian trade on Tuesday (Jul 4), as traders awaited the US Federal Reserve’s minutes of the June meeting for more clues on its interest rate hike path ahead. Spot gold edged 0.1 per cent lower to US$1,919.95 per ounce by 0107 GMT, while US gold futures were down similarly to US$1,927.80. The dollar index held steady. Trading volume could be light due to a US holiday. US manufacturing slumped further in June, with ISM’s manufacturing PMI dropping to 46.0 last month, the lowest reading since May 2020, from 46.9 in May. Yet price pressures at the factory gate continued to deflate since bottlenecks in the supply chain have eased considerably and higher borrowing costs dampen demand. Investors see an 87 per cent chance of a 25-basis-point hike in July, according to CME’s Fedwatch tool, bringing rates into the 5.25-5.50 per cent range before cuts are seen after March in 2024. Investors will watch for minutes of the Jun 13-14 FOMC meeting being released on Wednesday. High-interest rates discourage investment in non-yielding gold. Japan’s top financial diplomat Masato Kanda said on Tuesday that authorities were in close contact with US Treasury Secretary Janet Yellen and other overseas authorities, in lieu of the yen falling to a near eight-month low against the dollar last week. Spot silver fell 0.1 per cent to US$22.86 per ounce, platinum rose 0.6 per cent to US$911.52 while palladium jumped 1.4 per cent to US$1,245.95. REUTERS