Gold inches higher, focus on Fed minutes

FUNDAMENTALS

Spot gold was up 0.2% at $4,342.33 per ounce, as of 0030 GMT after falling nearly 2% on Tuesday. Meanwhile, U.S. gold futures for December delivery ‌edged 0.6% ⁠lower to $4,396.30.

⁠U.S. yields backed off earlier highs, switching directions amid a global bond selloff that saw ​long-term borrowing costs in major economies edge toward their highest levels in decades. [US/]

U.S. ​President Donald Trump said no talks were taking place with Iran and insisted the Strait of Hormuz was open, contradicting Iran’s assertion that the critical ​waterway remained shut to shipping. The receding prospects ⁠of a ‌deal to end the nearly six-month conflict drove up oil ​prices. [O/R]

Rising ​energy prices could bolster the case for higher interest ⁠rates to rein in inflation, despite recent U.S. economic indicators ​showing unexpected employment losses, milder inflation, and weak July ​retail spending.

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Despite gold being known as an inflation hedge, higher rates usually weigh on gold prices as they strengthen the dollar and make yield-bearing assets more attractive to investors.

The Fed’s release of minutes from the most recent meeting of its monetary policy-setting Federal Open Market Committee is ‌due at 1800 GMT.Traders are currently pricing in a 65% probability that the U.S. central bank will keep rates ​unchanged and a ​35% chance of ⁠a rate hike in September, according to the CME FedWatch Tool.

Meanwhile, the Bank of England will leave interest rates unchanged at 3.75% for the rest of the year, according to a strong majority of economists polled by Reuters.

Among other metals, spot silver fell 0.5% to $62.99 per ounce. Platinum climbed 0.3% to $1,717.03, while palladium lost 0.3% at $1,286.73.

DATA/EVENTS (GMT)

0600 UK Core CPI YY Jul

0600 UK CPI YY Jul

0600 UK CPI Services MM, YY Jul

0600 EU HICP Final MM, YY Jul