Gold flat as investors await cues from Fed minutes


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Gold prices were flat on Wednesday, as

investors awaited the release of the minutes of the U.S. Federal

Reserve’s last policy meeting later in the day that could offer

clues on further interest rate hikes.

FUNDAMENTALS

* Spot gold was flat at $1,775.59 per ounce, as of

0119 GMT, after hitting its lowest since Aug. 8 at $1,770.86 on

Tuesday.

* U.S. gold futures were steady at $1,788.80 per

ounce.

* The dollar held steady after rising to a three-week

peak against its rivals on Tuesday, while benchmark U.S. 10-year

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Treasury yields edged higher.

* Market participants are awaiting the minutes of Fed’s July

26-27 policy meeting due at 1800 GMT.

* The U.S. central bank has raised its benchmark overnight

interest rate by 225 basis points since March to tame high

inflation and is expected to raise its policy rate by another 50

or 75 basis points at its next meeting on Sept. 20-21.

* Although gold is seen as a hedge against inflation, rising

U.S. interest rates dull non-yielding bullion’s appeal.

* Data on Tuesday showed that U.S. homebuilding fell to the

lowest level in nearly 1-1/2 years in July, weighed down by

higher mortgage rates and prices for construction materials.

* Meanwhile, production at U.S. factories increased more

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than expected last month, as output rose at motor vehicle plants

and elsewhere, pointing to underlying strength in manufacturing

despite ebbing business confidence.

* SPDR Gold Trust , the world’s largest gold-backed

exchange-traded fund, said its holdings fell 0.18% to 992.20

tonnes on Tuesday from 993.94 tonnes on Monday.

* Spot silver was flat at $20.12 per ounce, platinum

eased 0.2% to $933.14, and palladium edged 0.1%

higher to $2,155.19.

DATA/EVENTS (GMT)

0600 UK CPI YY July

0900 EU GDP Flash Estimate QQ, YY Q2

1230 US Retail Sales MM July

1800 US The Federal Open Market Committee issues

minutes from its meeting of July 26-27

(Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi

Aich)

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