BENGALURU: Gold prices slipped to a near two-week low on Wednesday as the dollar firmed, while investors looked ahead to the release of minutes from the Federal Reserve’s latest policy meeting and US jobs data for more clarity on potential interest rate cuts.

Spot gold was down 0.8% at $2,043.49 per ounce as of 1227 GMT. US gold futures fell 1% to $2,051.60 per ounce.

“Gold is holding steady as markets still grapple with the odds surrounding Fed rate cuts this year,” said Han Tan, chief market analyst at Exinity Group.

“Spot gold should retain its upside bias as long as the Fed rate cuts narrative can remain intact. However, the precious metal may be forced into unwinding recent gains if the Fed isn’t able to press ahead with the policy pivot as anticipated for 2024.”

Traders are cautious ahead of the release of minutes from the US central bank’s December policy meeting, due at 1900 GMT on Wednesday. Investors are also keenly awaiting a slew of US economic data this week, including the non-farm payrolls report on Friday.

Futures markets see a 70% chance of a 25 basis points rate cut at the March meeting, according to CME’s FedWatch Tool. “We note that despite the Fed’s capitulation on forward guidance on 13 December, there remains a large gap between the market’s expectations of aggressive rate cuts and the Fed’s most recent ‘dot plot’ projection,” Mike Ingram, market analyst at Kinesis Money, said. “The minutes of the FOMC’s December meeting, expected later today, may shed further light on the Fed’s current thinking.”

Markets are also keeping a close eye on the tensions in the Middle East after the Gaza war stretched into Lebanon with the killing of Hamas deputy leader Saleh al-Arouri in a drone strike in Beirut on Tuesday.

Spot silver fell 1.8% to $23.227 per ounce, hitting its lowest since Dec. 13, 2023. Platinum was down 1.3% to $969.30 and palladium fell 2% to $1,059.71 per ounce.