Gold flat as focus turns to Fed minutes for monetary policy path clues

Gold prices remained steady on Wednesday (Oct 7) at US$4,159.62 per ounce as investors directed their attention towards the US Federal Reserve's minutes, seeking insights into its monetary policy trajectory. By 0038 GMT, US gold futures for December delivery were also unchanged, sitting at US$4,187.30. Minutes from the Federal Open Market Committee's September meeting are expected later in the day.

San Francisco Fed President Mary Daly expressed support for the September interest rate increase amid growing inflation concerns, but cautioned that the necessity for additional hikes depends on whether inflationary pressures are easing or persisting. Kansas City Fed President Jeff Schmid reiterated the Fed's commitment to further rate hikes to curb inflation, even if higher long-term yields dampen economic activity in certain sectors.

Recent weak economic indicators have dampened expectations of a rate hike in October, although traders still maintain an 85 per cent probability of an increase in December. Despite the high interest rate environment, investors typically gravitate towards yield-generating assets like gold. Projections from delegates at the London Bullion Market Association's annual conference in Sorrento, Italy, anticipate gold prices to climb to US$5,013 per troy ounce within the next year.

Meanwhile, US Vice-President JD Vance cautioned Iran to implement a "meaningful" reduction in its nuclear enrichment activities to meet US demands and bring an end to the nation's seven-month conflict. Meanwhile, Washington's understanding of Tehran's decision-making process in negotiations remains unclear. The price of silver slipped 0.6 per cent to US$61.32, platinum increased by 0.4 per cent to US$1,707.65, and palladium decreased marginally by 0.1 per cent to US$1,170.75.