Gold prices were subdued on Wednesday as investors waited for minutes from the Federal Reserve’s September policy meeting for more clues about the future path of U.S. interest rates.
Spot gold slipped around 0.6% to roughly $4,138 per ounce, while U.S. gold futures were down about 0.5%. A firmer U.S. dollar added pressure, making bullion more expensive for buyers using other currencies.
Recent softer employment and inflation data have reduced expectations for an immediate October rate increase, but markets still see a strong possibility of another Fed hike later this year.
That makes the September meeting minutes particularly important. Investors will be looking for signs of disagreement inside the Fed over inflation, labor-market weakness and whether policy needs to remain restrictive for longer.
Gold normally faces pressure when interest rates and Treasury yields rise because the metal does not provide interest income.
However, gold has remained above $4,000 despite the sharp rise in bond yields, supported by central-bank demand, geopolitical risk and continued investor interest in gold-backed funds.
For markets, the reaction in the dollar and Treasury yields after the minutes may matter as much as the minutes themselves.