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Gold on Sidelines as Markets Eye Fed Minutes

Gold is unchanged in the Wednesday session. In North American trade, the spot price for one ounce of gold is $1196.40, down 0.02% on the day. On the release front, Existing Homes dropped to 5.34 million, short of the estimate of 5.38 million. This points to a worrying trend, as the indicator has now lost ground for a fourth straight month. Today’s key event is the Federal Reserve minutes from the August 1 policy meeting. On Thursday, the U.S releases unemployment claims.

Gold prices are sensitive to interest rate moves, so the Fed minutes could lead to some movement from gold prices, which have been subdued on Wednesday. The Fed statement from that meeting described the economy as “strong”, the first time it used that term since 2006. Fed policymakers reiterated their commitment to raise interest rates gradually, as economic conditions remain strong. In the second quarter, GDP grew 4.1%, inflation has moved closer to the Fed’s target of 2%, and unemployment remains at record lows. The minutes are expected to underscore the Fed’s intent to raise rates twice more this year, in September and December. The Fed’s approach to rate hikes appears economically sound, but President Trump criticized the Fed this week, saying he was “not thrilled” with higher rates. Still, the Fed is widely expected to raise rates twice more this year, in September and December.