By Ashitha Shivaprasad
(Reuters) – Gold prices slipped on Wednesday as investors strapped in for minutes from the Federal Reserve’s most recent policy meeting for further insights on the timeline for interest rate cuts.
Spot gold eased 0.3% at $2,413.99 per ounce, as of 0838 GMT. Prices had scaled a record high of $2,449.89 on Monday.
U.S. gold futures were down 0.4% at $2,417.50.
“Gold is just consolidating after its big run up. In the short term, it can potentially not go higher without additional support from dollar with focus on the outlook for rate cuts. But, it has been an incredibly strong market and buy on dip mentality is still there,” Ole Hansen, head of commodity strategy at Saxo Bank said.
Minutes of the Fed’s May policy meeting are due at 1800 GMT.
Lately, economic data has pointed towards a downtrend in inflation, but U.S. central bank policymakers said on Tuesday that the Fed should wait several more months to ensure that inflation really is back on track to its 2% target before cutting interest rates.
Bullion is known as an inflation hedge, but the opportunity cost of holding this non-interest-bearing asset increases with higher interest rates.
“Fundamentally, the outlook remains constructive for gold whilst central bank buying underpins demand,” Tim Waterer, chief market analyst at KCM Trade said in a note.
“If gold is to make another run in the direction of $2,450, moderate resistance at $2,436 will need to be cleared first.”
Spot silver fell 0.8% to $31.70 after hitting a more than 11-year high on Monday.
“There is quite a lot of focus on silver. It is potentially easier to buy silver because it has not yet reached record levels relative to gold but at the same time, we need to watch the gold-silver ratio,” Saxo Bank’s Hansen said.
Platinum rose 0.7% to $1,053.45 and palladium dropped 1.1% to $1,014.75.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Mrigank Dhaniwala)
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