Some investors view gold as a hedge against higher inflation, but the metal is highly sensitive to rising US interest rates
Gold prices slid to one-week low on Thursday as minutes of the US Federal Reserve’s December meeting signalled quicker increases to interest rates, boosting the dollar and treasury yields.
The “very hawkish” Fed minutes sent the dollar and the yields significantly higher, which has not helped gold, said independent analyst Ross Norman. The Fed minutes released on Wednesday showed that officials had discussed shrinking the US central bank’s overall asset holdings as well as raising interest rates sooner than expected to fight inflation, with an 80% chance of a quarter of a percentage point increase plausible in March.“Where the precious metal closes the week is likely to be heavily influenced by the key US jobs data on Friday,” FXTM analyst Lukman Otunuga said in a note.