Gold flat as focus turns to Fed minutes

Gold prices experienced a slight decline on Wednesday as traders analyzed minutes from the Federal Reserve's September meeting, seeking insights into whether policymakers would continue raising interest rates. Spot gold fell by 0.3% to $4,150.23 per ounce by 0145 GMT, while US gold futures dipped 0.2% to $4,177.60. Minutes from the latest Federal Open Market Committee meeting are expected later in the day.

Frank Walbaum, an analyst, stated that the yellow metal is likely to remain relatively stable with a mild downside bias. He added that the minutes would clarify the Fed's monetary policy, the extent of support among policymakers for further rate hikes, and could potentially alter upcoming hike odds. Walbaum noted that any developments in the Middle East, such as changes in long-term Treasury yields, the dollar, or oil prices, could amplify the impact on gold.

Recent remarks from Fed officials highlighted the central bank's dedication to controlling inflation. San Francisco Fed President Mary Daly indicated that the decision on additional rate hikes depends on whether the factors contributing to inflation fade or persist. Kansas City Fed President Jeff Schmid also suggested that rates needed to rise further to bring inflation under control.

Although recent weak economic data had diminished expectations of an October rate increase, traders still believed there was an 85% probability of a hike by December.

In a high interest rate environment, investors typically prefer yield-generating assets over gold. At the London Bullion Market Association's annual conference in Sorrento, Italy, delegates projected that gold could climb to $5,013 an ounce over the next year. Meanwhile, US Vice President JD Vance stated in an exclusive interview with Reuters that Iran must make a "meaningful" reduction in its nuclear enrichment capacity to meet US demands and end the ongoing seven-month conflict.

Silver prices slipped by approximately 1% to $61.12, platinum rose 0.2% to $1,704.25, and palladium declined 0.3% to $1,168.20.