Gold firms as investors buy the dip ahead of Fed's meeting minutes
Gold firmed on Wednesday as investors bought the dip after prices declined in the previous session, while markets awaited minutes of the Federal Reserve's latest policy meeting and economic data for insights on the U.S. interest rate outlook.
Spot gold was up 0.6% to $3,320.58 an ounce, as of 0853 GMT. Bullion fell below the $3,300 level and hit a low of $3,285.19 in the previous session.
U.S. gold futures rose 0.6% to $3,319.50.
"Gold is rebounding mainly due to bargain hunting after a sharp drop in the previous session," said Jigar Trivedi, senior commodity analyst at Reliance Securities.
"Markets are also in a wait-and-watch mode ahead of the Fed minutes, prompting position adjustments."
Markets are awaiting minutes of the Federal Reserve's latest policy meeting due later in the day, followed by the U.S. PCE data for April, due on Friday. A slew of Fed officials are also speaking this week for further insights into monetary policy.
"Gold could climb on lower-than-expected PCE prints that ease stagflation fears while paving the way for more Fed rate cuts," said Han Tan, chief market analyst at Exinity Group.
New York Fed President John Williams said on Wednesday central banks must "respond relatively strongly" when inflation begins to deviate from their target.
The Fed has kept its policy rate at 4.25%-4.50% since December as officials wait for clearer insights into the economy as policymakers are also dealing with market volatility caused by U.S. President Donald Trump's fluctuating remarks on negotiations with the country's trading partners.
"Gold may ultimately break out of the $3,000-$3,500 range once the Fed signals greater willingness to resume its rate-cutting cycle," Tan said.
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