Market Analysis

Gold prices declined for the third consecutive session on Thursday following the release of minutes from the latest Federal Reserve meeting, which indicated some officials' inclination towards raising interest rates.

As of 0335 GMT, spot gold was down 0.3% to $2,370.74 per ounce, after a drop of over 1% in the previous session. Earlier in the week, bullion had reached a peak of $2,449.89.

U.S. gold futures also slipped by 0.8% to $2,373.00.

While the current policy stance suggests maintaining the Fed's benchmark rate, discussions in the minutes hinted at potential future rate hikes rather than cuts.

"Gold faced pressure after the Fed minutes underscored that interest rate reductions are not on the near horizon," noted Tim Waterer, chief market analyst at KCM Trade.

Gold is traditionally seen as a hedge against inflation, but higher rates increase the opportunity cost of holding non-yielding assets like gold.

"If the dollar continues to strengthen, there's a possibility that gold could retreat to support levels around $2,355," Waterer added, emphasizing that the longer-term outlook remains positive for gold, contingent on the Fed's next move potentially being a rate cut rather than an increase.

Market sentiment reflected growing skepticism about the likelihood of multiple rate cuts by the Fed in 2024, with current expectations indicating a 73% probability of a rate cut by November.

In India, gold imports in 2024 are expected to decline by nearly 20% from the previous year due to record high prices prompting retail consumers to exchange old jewellery for new purchases, according to a statement from a leading industry representative to Reuters.

Meanwhile, spot silver fell by 0.8% to $30.52, platinum decreased marginally by 0.2% to $1,032.54, and palladium dropped 1.1% to $988.25.

Paraphrasing text from "Reuters" all rights reserved by the original author.