The weakness of the U.S. dollar following the released meeting from the Federal Reserve’s stabilized the price of gold. The minutes showed that the central bank could endure a more watchful approach to interest rate hikes.
U.S. gold futures finished higher more than $3.30 to trade at $1,256.40 per ounce, while spot gold fell down by 0.24 percent at $1,255.10 per ounce. It is already given that rate hikes will drive bond yields higher and will strengthen the U.S. currency. This will also further heighten the opportunity cost of owning the dollar-priced gold, thus pressuring its price.
The resilience of the yellow metal could stumble in the weeks to come as the U.S. Federal Reserve suggested in its meeting that a tighter monetary policy is happening, according to Capital Economics analyst Simona Gambarini. CME Group’s FedWatch tool suggested that federal fund futures indicated that traders assume an 83 percent chance that Fed will lift rates by a quarter of a percentage points for its meeting next month.
Investors are expecting rates to be lifted in the U.S. this June, and will likely hike again later this year. These have been a main factor that keeps the bullion fastened below the $1,300 handle; however according to some analysts, the price will remain solid in the coming sessions.
Meanwhile in other precious metals; palladium added 0.98 percent to $770.50 an ounce, platinum edged higher by 0.18 percent at $945.74 an ounce, and spot silver was slightly down by 0.08 percent at $17.17 an ounce.