In light of the upcoming Fed minutes, gold remains stable in early trade

5 Jul 2023 , 11:38 AM

A stronger dollar kept gold prices in check on Wednesday as investors awaited the release of the latest minutes of the Federal Reserve’s monetary policy meeting as well as other economic data.

Spot gold remained unchanged at $1,926.52 per ounce, while U.S. gold futures increased by 0.3% to $1,934.30.

The dollar index remained stable, which reduced the appeal of gold to foreign investors.

The minutes of the June 13–14 FOMC meeting, at which the central bank maintained interest rates stable at 5%–5.25% and indicated that it would need to deliver at least two additional quarter-point rate increases before the end of the year, will be closely watched by investors.

Non-yielding gold is often regarded as a safe investment in uncertain economic times, although high-interest rates discourage investing in it.

In June, the major central banks of the globe surprised the markets by raising interest rates at the highest rate of the year, signalling that there will likely be further tightening as policymakers struggle to gain the upper hand in the war against inflation.

The data on China’s services purchasing managers index for June, which is due out on Wednesday amid the most recent escalation of U.S.-Sino tensions, will be the most significant Asian economic indicator from a jam-packed schedule.

On Tuesday, companies scrambled to secure supply after China decided to impose export restrictions on two metals that are often used in semiconductors and electric vehicles. Some industry suppliers were concerned that the move might lead to restrictions on rare earth shipments.

The price of spot silver increased by 0.2% to $22.9876 an ounce, platinum increased by 0.3% to $917.71, and palladium increased by 0.7% to $1,251.94.

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