Gold inches higher as dollar weakens; Fed minutes on radar

Gold prices inched up on Wednesday buoyed by a weaker dollar, while investors awaited the minutes of the U.S. Federal Reserve’s latest policy meeting that could offer clues on further interest rate hikes.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,741.80 per ounce by 0044 GMT. U.S. gold futures edged 0.2% higher to $1,742.70.

* The dollar fell 0.6% overnight and was flat at 107.080 during early trading on Wednesday, making gold less expensive for other currency holders.

* Market participants are awaiting the minutes of Fed‘s Nov. 1-2 policy meeting due at 1900 GMT.

* At the beginning of this month, the U.S. central bank delivered a fourth consecutive 75 basis-point rate hike to tame inflation in what has become the fastest tightening of monetary policy in 40 years.

* The Fed may need to raise interest rates to a higher level and hold them there for longer in order to successfully moderate consumer demand and bring down high inflation, Kansas City Fed President Esther George said on Tuesday.

* Fed Bank of Cleveland President Loretta Mester reiterated that getting inflation down remains critical for the central bank.

* Although gold is seen as a hedge against inflation, rising U.S. interest rates dull non-yielding bullion’s appeal.

* Fed fund futures are now pricing in a 79% chance of 50-basis point hike in the December meeting.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.10% to 906.93 tonnes on Tuesday from 906.06 tonnes on Monday.

* Spot silver was steady at $21.08 per ounce, platinum rose 0.4% to $994.50, while palladium was little changed at $1,858.20.