Gold struggles as investors await clues for further Fed rate hikes

Gold struggled for momentum on Wednesday, as investors awaited minutes from the US Federal Reserve’s last policy meeting that could offer clues on further interest rate hikes amid signs of easing inflation.

Spot gold was flat at $ 1,775.91 per ounce, as of 2.42am GMT, after hitting its lowest since August 8 at $ 1,770.86 on Tuesday. US gold futures edged 0.1% higher to $ 1,791.10.

“Focus is on minutes from the July federal open market committee ( FOMC) meeting and the Jackson Hole Symposium on August 25- 27. Both these events will set the stage for [ the] Fed meeting in September,” said Ilya Spivak, a currency strategist at DailyFX. “If we are going to get a more hawkish view from the Fed on rate hikes, that’s going to be somewhat negative for gold in terms of its core appeal for investors.”

The minutes of the Fed’s July 26- 27 policy meeting are due at 6.00pm GMT. The US central bank has raised its benchmark overnight interest rate by 225 basis points ( bps) since March to tame high inflation. Traders were pricing in about a 42.5% chance of a 75 ( bps) rate hike and a 57.5% chance of a 50 bps increase at the Fed’s next meeting on September 20- 21. Though gold is seen as a hedge against inflation, rising US interest rates dull non- yielding bullion’s appeal.