Gold eases on swift recovery bets as focus turns to Fed minutes

Gold prices fell on Wednesday as strong economic data from the United States bolstered hopes of a swift recovery, with focus also turning to minutes from the Federal Reserve's last policy meeting for monetary policy cues.

Spot gold fell 0.3% to $1,738.35 per ounce by 10:26 a.m. EDT (1426 GMT). US gold futures were down 0.2% at $1,739.90.

"The gold market is looking at an economy that's recovering much quicker than anyone anticipated, which could change the stance of the of the Fed going forward," said Jeffrey Sica, founder of Circle Squared Alternative Investments.

Investors were re-calibrating their expectations on the Fed's monetary policy, with some investors expecting the Fed to abandon its pledge to keep interest rates near zero until 2024.

Non-yielding bullion is highly sensitive to higher rates, as they increase the opportunity cost of holding gold and boost dollar and bond yields.

Data on Tuesday showed US job openings rose to a two-year high in February, while strengthening domestic demand helped hiring amid increased COVID-19 vaccinations and additional pandemic aid from the government.

"The economic news has been Solid, and has gotten gold investors to sit back on their heels and wait for a clarification from the Fed," Sica added.

Minutes from the Fed's March 16-17 policy meeting are due at 1800 GMT.

The International Monetary Fund raised its outlook for global economic growth again on Tuesday, forecasting worldwide output would rise 6% this year, a rate unseen since the 1970s.

Central banks across the globe, in particular the European Central Bank and the Federal Reserve, want to see higher growth and inflation numbers before they think about changing monetary policy, said Commerzbank analyst Carsten Fritsch.

Among other precious metals, silver fell 0.4% to $25.07 per ounce, palladium was down 1.7% at $2,640.32, after declining as much as 3.5% earlier.

Platinum eased 0.4% to $1,228.04, having earlier risen to $1,244.50, its highest since Feb. 25.