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Gold Inches Up as Dollar Dips
Gold Inches Up as Dollar Dips

Gold Inches Up as Dollar Dips

Gold Inches Up as Dollar Dips

Gold prices crept up on Wednesday amid a softer dollar, with investors remaining cautious ahead of the release of minutes from the US Federal Reserve’s last meeting, which could offer hints on the outlook for the central bank’s monetary policy.

Spot gold was up 0.2% at $1,283.21 per ounce. US gold futures for December delivery gained 0.1% at $1,282.80. Reuters reported.

“We are not really sure that this (Fed meeting minutes) will have much of an impact given that the decision to raise rates in December is pretty much a foregone conclusion,” INTL FCStone analyst Edward Meir said.

“Nevertheless, we suspect that investors will want to see what policymakers are thinking about the rate situation and how aggressive they will be on this front going forward.” The Fed kept interest rates unchanged at its last meeting, minutes of which will be released on Wednesday.

Higher interest rates help the dollar gain and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

In other markets, the dollar index against a basket of six major currencies was down 0.2%.

Amid lack of investment demand, gold’s inverse relationship with the dollar is the strongest in more than a decade, Julius Baer analyst Carsten Menke said in a note.

“While the dollar is unlikely to return to its recent peak, we still see upside from current levels as the US Federal Reserve continues to hike interest rates. This should weigh on gold prices heading into next year.”

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