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Gold prices decline ahead of Fed meeting minutes

Gold prices held above the $2,400 key level ahead of potential interest rate cuts later this year
Gold prices decline ahead of Fed meeting minutes
Lower interest rates in addition to geopolitical tensions support bullion's appeal as a safe investment, thus supporting gold prices

Gold prices saw a decline on Wednesday but remained above the key $2,400 level as investors await the Federal Reserve‘s latest policy meeting minutes for more clues on the timing of the next interest rate cuts.

Spot gold saw a 0.35 percent decline to $2,412.65 per ounce, as of 5:38 GMT, after hitting a record high of $2,440.49 at the beginning of the week. Meanwhile, U.S. gold futures saw a 0.40 percent decline to $2,416.10.

Fed meeting minutes

Traders now await the Fed’s latest meeting minutes, which are due at 18:00 GMT. Markets now expect a 64 percent chance of an interest rate cut in September.

Recent consumer price data revealed a decline in inflation in April. However, Federal Reserve officials expressed their caution, stating the need to wait longer to ensure that inflation is back on track to the central bank’s 2 percent target. Lower interest rates in addition to geopolitical tensions support bullion’s appeal as a safe investment, thus supporting gold prices.

For now, gold prices have held ground above the $2,400 key level ahead of potential interest rate cuts later this year. Analysts believe that for gold prices to hit a new record high, a decline in the dollar or bond yields is crucial. Moreover, an increase in gold’s safe-haven demand amidst tensions could also raise the precious metal to a new high.

Read: Gold prices decline from record high on stronger dollar

Other precious metals

In addition to gold prices, spot silver saw a 0.72 percent decline to $31.73 after hitting an 11-year high on Monday. Platinum rose 0.04 percent to $1,046.88 while palladium declined 0.62 percent to $1,019.61.

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