By Brijesh Patel
(Reuters) – Gold was hemmed into a narrow trading range on Wednesday as investors positioned for the U.S. Federal Reserve’s latest policy meeting minutes, which could offer clues on further interest rate hikes.
Spot gold ticked 0.1% lower to $1,737.79 per ounce by 06:47 GMT, while U.S. gold futures were little changed at $1,738.20.
Gold is “seeing a bit of a correction” following gains of about 10% during the first half of November, said Craig Erlam, senior market analyst at OANDA.
But if the minutes show that more policymakers are backing slowing the pace of tightening from December, that could be a bullish catalyst for gold, Erlam added.
Minutes of the Fed’s Nov. 1-2 policy meeting are due at 1900 GMT. U.S. durable goods data and weekly initial jobless claims are also on the radar of investors.
“There is some nervousness in the market ahead of the Fed minutes,” said Edward Meir, an analyst with ED&F Man Capital Markets.
The U.S. central bank delivered a fourth consecutive 75 basis-point rate hike earlier this month.
The Fed may need to raise rates to a higher level and hold them there for longer in order to successfully moderate consumer demand and bring down high inflation, Kansas City Fed President Esther George said on Tuesday.
Fed fund futures are now pricing in a 79% chance of 50-basis point hike in December.
Although gold is considered a hedge against inflation, rising U.S. rates dull non-yielding bullion’s appeal.
“In the near term, expect gold prices to work a bit higher from here into year-end because I see the dollar weakening some more and we’re very close to peaking out on inflation and interest rates,” Meir said.
Spot silver fell 0.1% to $21.06 per ounce, while platinum rose 0.3% to $993.38. Palladium gained 0.8% to $1,875.45.
Graphic: Xau- https://fingfx.thomsonreuters.com/gfx/ce/lbpggnjqqpq/Pasted%20image%201669171038792.png
(Reporting by Brijesh Patel and Arundhati Sarkar in Bengaluru, additional reporting by Arpan Varghese; Editing by Rashmi Aich and Saumyadeb Chakrabarty)
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