Gold struggles for direction with Fed minutes on the radar
Gold prices were little changed on Wednesday, with gains curbed by a firmer dollar, while investors braced for any guidance on future U.S. interest rate hikes from the minutes of the Federal Reserve's latest policy meeting.
Spot gold was flat at $1,775.85 per ounce at 0845 GMT. U.S. gold futures were little changed at $1,789.20.
Gold is struggling to find a clear direction, and so the Fed's minutes could represent a significant market driver, with the central bank's annual Jackson Hole Symposium getting closer, said Carlo Alberto De Casa, external analyst for Kinesis Money.
"Inflation has given some signal that we could have reached the peak, but before seeing any further rebound in gold, investors will probably need some dovish signal from the Fed," he added.
The Fed has raised its benchmark overnight interest rate by 225 basis points (bps) in total since March to tame high inflation. Traders are pricing in a 50 or 75 bp rate hike at its September meeting
Recent hawkish remarks from Fed policymakers has led to a pullback in gold prices from the key $1,800 level, despite signs of easing inflation.
Rising U.S. interest rates increase the opportunity cost of holding non-yielding bullion.
However, StoneX analyst Rhona O'Connell said: "the Empire State Manufacturing figures which were dreadful, argue for a more benign rate hike than last time," and that supports gold as it thrives on uncertainty.
"The Fed has dropped its previous policy of guidance so the minutes, which are three weeks out of date, will only really give us a backdrop," O'Connell said, adding the market will, however, be waiting to read between the lines.
The dollar firmed against its rivals, with the focus on U.S. retail sales data and the Fed minutes. [USD/]
Meanwhile, data showed British consumer price inflation jumped to 10.1% in July, its highest since 1982.
Spot silver fell 0.6% to $20.00 per ounce, platinum dropped 0.5% to $930.16.
Palladium was little changed at $2,152.20.