Gold muted as resilient dollar loses appeal; Focus on Fed minutes from Reuters

©Reuters. FILE PHOTO: Marked bars of 99.99 percent pure gold are placed in a trolley at the Krastsvetmet Nonferrous Metals Plant in the Siberian city of Krasnoyarsk, Russia, March 10, 2022. REUTERS/Alexander Manzyuk/

By Eileen Soreng

(Reuters) – Gold prices were subdued in a choppy trade on Wednesday, as a resilient dollar and the prospect that the Federal Reserve may hike interest rates aggressively kept unyielding bullion bars near a one-week low.

Spot Gold XAU= was down 0.1% to $1,921.60 an ounce by 8am EDT (1200GMT). US GCv1 was down 0.2%


Gold hit its lowest level since March 29, a move that came a day after Fed Governor Lael Brainard’s comments bolstered expectations of aggressive action by the US Federal Reserve to tame inflation. (Full story)

Brainard’s comments propelled the US dollar and government bond yields to multi-year highs and dampened gold’s appeal. USD/ US/

The Fed is expected to release the minutes of its March 15-16 Federal Open Market Committee policy meeting at 2:00 p.m. EDT (1800 GMT).

“Gold could dip back into the sub-$1,900 area if FOMC minutes or the Fed provide further aggressive guidance in the coming days,” said Han Tan, chief market analyst at Exinity.

Rising US interest rates and higher yields increase the opportunity cost of holding bullion, which is also used as a hedge against rising inflation.

“However, further sanctions against Russia, adding to inflationary pressures and further clouding the global economic outlook, should provide notable support for Russia,” Tan added.

Global stocks fell as the United States and its allies prepared new sanctions against Moscow over killings of civilians, which Ukraine described as “war crimes,” while Russian artillery shelled the Ukrainian cities of Mariupol and Kharkiv. (Full Story) MKTS/GLOB

“There are still a number of things that could trigger another rally in gold. Inflation continues to rise above current expectations, talks between Ukraine and Russia will collapse or a recession,” said Craig Erlam, Senior Market Analyst at OANDA.

Among other precious metals, spot silver fell 0.7% to $24.15 an ounce, platinum fell 0.3% to $965.20 and palladium rose 0.4% to $2,247.53.

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