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Gold prices hit a two-week low on Friday, set for their biggest weekly loss in nearly eight months, as interest rate cut expectations started to dwindle after a hawkish tone in the U.S. Federal Reserve minutes.

Spot gold listless at $2,330.19 per ounce, as of 0341 GMT, after hitting its lowest since May 9 earlier. Bullion hit a record high of $2,449.89 on Monday, but has fallen about 5% since then.

U.S. gold futures eased 0.3% at $2,330.80.

"The hawkish tone in minutes from May's Fed policy meeting flagging policymakers' inability to confidently cut rates...has driven up Treasury yields and the dollar, and metals seem to have taken notice," said Ilya Spivak, head of global macro at Tastylive. [USD/] [US/]

Bullion is known as an inflation hedge but higher rates increase the opportunity cost of holding non-yielding gold.

While the policy response for now would "involve maintaining" the U.S. central bank's benchmark policy rate at its current level, the minutes released on Wednesday also reflected discussions of possible further hikes.

Traders' bets indicated rising scepticism that the Fed will lower rates more than once in 2024.

Spivak noted that "Chinese reserve buying remains a notable tailwind overall. The pace of uptake slowed to 9% year-on-year in April from 11% at 2023-end, but the

Gold prices hit a two-week low on Friday, set for their biggest weekly loss in nearly eight months, as interest rate cut expectations started to dwindle after a hawkish tone in the U.S. Federal Reserve minutes.

Spot gold listless at $2,330.19 per ounce, as of 0341 GMT, after hitting its lowest since May 9 earlier. Bullion hit a record high of $2,449.89 on Monday, but has fallen about 5% since then.

U.S. gold futures eased 0.3% at $2,330.80.

"The hawkish tone in minutes from May's Fed policy meeting flagging policymakers' inability to confidently cut rates...has driven up Treasury yields and the dollar, and metals seem to have taken notice," said Ilya Spivak, head of global macro at Tastylive. [USD/] [US/]

Bullion is known as an inflation hedge but higher rates increase the opportunity cost of holding non-yielding gold.

While the policy response for now would "involve maintaining" the U.S. central bank's benchmark policy rate at its current level, the minutes released on Wednesday also reflected discussions of possible further hikes.

Traders' bets indicated rising scepticism that the Fed will lower rates more than once in 2024.

Spivak noted that "Chinese reserve buying remains a notable tailwind overall. The pace of uptake slowed to 9% year-on-year in April from 11% at 2023-end, but the PBOC (People's Bank of China) is still a major source of demand. That might keep losses limited for now."

The gold/silver ratio has now dropped, so momentum trends might switch off to favor gold again, he added.

Spot silver rose 0.4% to $30.21.

Platinum edged 0.1% higher to $1,019.90 and palladium gained 0.3% to $971.80. All three metals were headed for weekly losses.

Russia's Nornickel plans to build a PGMs refinery in Bahrain, a source familiar with the matter told Reuters

(People's Bank of China) is still a major source of demand. That might keep losses limited for now."

The gold/silver ratio has now dropped, so momentum trends might switch off to favor gold again, he added.

Spot silver rose 0.4% to $30.21.

Platinum edged 0.1% higher to $1,019.90 and palladium gained 0.3% to $971.80. All three metals were headed for weekly losses.

Russia's Nornickel plans to build a PGMs refinery in Bahrain, a source familiar with the matter told Reuters.