Gold prices have been on a downward trend since hitting a record high of $2,449.89 on Monday. Minutes from the latest Federal Reserve meeting indicated that some Fed officials have not yet ruled out an interest rate hike, sparking speculation among traders and impacting gold prices on Thursday.
In Saudi Arabia, 24-carat gold saw a 1.10 percent decline to SAR285.22 per gram and SAR8,871.3 per ounce.
Globally, spot gold saw a 0.25 percent decline to $2,373.0 per ounce, as of 5:17 GMT, after prices hit a record high at the beginning of the week. Meanwhile, U.S. gold futures saw a 0.79 percent decline to $2,374.0.
Fed meeting minutes
The Federal Reserve’s meeting minutes highlighted the sentiment of policymakers who generally indicated that interest rates will remain unchanged for now. However, some discussions revolved around possible further increases in interest rates. Following this release, gold prices have taken a hit, declining over 1 percent in the previous session. Traders consider gold an inflation hedge. However, higher rates increase the opportunity cost of holding non-yielding gold.
Analysts believe that gold prices could decline to the support level of $2,355 if the dollar remains strong. Despite the decline, the outlook for gold remains positive but conditional on rate cuts.
Traders are currently pricing in a 73 percent chance of an interest rate cut in November, farther from their previous expectations of September.
Read: Oil prices dip amid concerns over prolonged high U.S. rates, weaker demand
Other precious metals
In addition to gold prices, the metals market saw declines for all commodities. Spot silver fell 0.75 percent to $30.53, platinum declined 0.17 percent to $1,033.20, and palladium dropped 0.80 percent to $991.47.
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