Gold prices stabilized after briefly touching key highs in Asian trade on Wednesday as lingering uncertainty over the Fed’s monetary policy trajectory dampened investor enthusiasm.
Expectations that the Fed’s interest rate hike cycle is coming to an end have driven recent gains in gold prices. However, the minutes of the Fed’s late October meeting released on Tuesday showed that the central bank maintained its hawkish stance, emphasizing its commitment to maintaining high interest rates over the long term.
While the market still believes the Fed is unlikely to raise rates further in the near future, the minutes expressed skepticism about the timing of a possible rate cut. Traders are reconsidering expectations for a March 2024 rate cut, according to CME Group’s Fed Watch tool.
Spot gold was flat at $1,999.39 an ounce as of 00:21 ET (05:21 GMT), while gold futures for December expiration were steady at $2,000.65 an ounce. Futures rose as high as $2,009.80 an ounce on Tuesday, but gave back some of those gains after the release of Federal Reserve minutes.