Gold stuck to a narrow range on Wednesday as investors awaited the release of the U.S. Federal Reserve’s latest monetary policy meeting minutes later in the day, with a stronger dollar also weighing on prices.
Spot gold was little changed at $1,923.66 per ounce by 0243 GMT, while U.S. gold futures rose 0.1% to $1,931.20.
The dollar index ticked up 0.1%, making bullion less attractive for overseas buyers.
“Fed minutes are likely to reveal a lively debate where still more rate hikes are to come. This could cause some softness in gold in the very short term, but medium to long term seekers of security will be buying any dip,” said Clifford Bennett, chief economist at ACY Securities.
The Federal Open Market Committee will issue minutes from its June 13-14 meeting at 1800 GMT. Investors expect the central bank to resume its tightening campaign in July after it signalled the need to deliver at least two more quarter-point interest rate hikes before the end of the year.
High interest rates discourage investing in non-yielding gold, which is otherwise seen as a safe investment amid economic uncertainties.
The world’s major central banks delivered the biggest number of monthly interest rate hikes year-to-date in June, surprising markets and flagging more tightening ahead as policy makers grapple to get the upper hand in the battle against inflation.
However, the ongoing discord between the United States and China seeks to remind investors, “having a little gold in one’s portfolio remains advisable,” Bennett further said, adding gold still looks, “even after the recent correction to be capable of achieving new highs by years end.”
Meanwhile, services activity of top bullion consumer China expanded at the slowest pace in five months in June, a private-sector survey showed on Wednesday.
Spot silver held steady at $22.9396 per ounce, while platinum was little changed at $915.29. Palladium rose 0.2% to $1,244.70.
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