Gold prices lower on stronger dollar, Fed minutes in focus

Gold prices declined on Wednesday as the dollar advanced in the run-up to the U.S. Federal Reserve’s May meeting minutes.

Spot gold fell 0.5% at $1,857.39 per ounce by 0636 GMT, after rising to a two-week high of $1,869.49 on Tuesday. U.S. gold futures plunged 0.5% to $1,856.50.

The dollar gained after hitting its lowest level in a month in the previous session, making the yellow metal more expensive for buyers.

“Traders will be looking to the FOMC (Federal Open Market Committee) minutes for policy hints beyond June and July, as September rate hike expectations could be hugely pivotal for gold prices,” said Stephen Innes, managing partner at SPI Asset Management. The FOMC is expected to release the minutes from its May 3–4 policy meeting at 1800 GMT.

As the Federal Reserve is keeping trying to fight 40-year-high inflation with what is expected to be a string of big interest-rate increases, analysts warn that these rate hikes could send the economy recession.