As investors watched the minutes of the Federal Reserve’s most recent policy meeting for more hints about the central bank’s path to cutting interest rates, gold prices firmed on Wednesday. By 0656 GMT, spot gold had increased by 0.4% to $2,338.88 an ounce, and futures for US gold increased by 0.6% to $2,346.80.
Following Fed Chair Jerome Powell’s dovish remarks, the dollar continued to decline. When the dollar declines, gold becomes more appealing to holders of other currencies.
Powell claimed on Tuesday that the United States was once again on a “disinflationary path” but that policymakers needed more information before lowering rates. Powell made this announcement ahead of the Fed minutes release at 1800 GMT.
Since there are so many elections this year, bullion prices could rise later, according to Marex analyst Edward Meir, who noted that the gold market has been stuck in a narrow range for a few weeks.
Investors will next be watching the nonfarm payrolls report, due on Friday, and the ADP employment and weekly jobless claims data, which are due later in the day.
“The NFP release this week could shake things up (for the gold market) if we see a shift in rate-cut expectations,” stated Tim Waterer, chief market analyst at KCM Trade. According to CME FedWatch Tool, traders see a 65% chance of a Fed rate cut in September.
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