The minutes from the Fed’s late-April meeting, scheduled for release later on Wednesday, are now the focal point for traders seeking further guidance from the central bank. During the meeting, the Fed maintained steady interest rates, while Chair Jerome Powell hinted at potential rate cuts in 2024. Traders are eager to determine if this sentiment is shared by other Fed officials, particularly as inflation remains stubbornly high.
Several Fed officials have cautioned this week that more evidence of declining inflation is needed before the central bank can consider reducing rates. Their comments have bolstered the U.S. dollar and pressured most high-risk and non-yielding assets.
High interest rates negatively impact gold by increasing the opportunity cost of holding the non-yielding asset. While safe-haven demand had driven gold to record highs earlier in the week, the lack of escalating tensions in the Middle East has left the yellow metal exposed to rate pressures.
Other precious metals also saw declines on Wednesday. Platinum futures fell 0.4% to $1,058.35 per ounce, while silver futures dropped 0.4% to $31.950 per ounce. Earlier this week, a speculative surge had driven silver prices to 12-year highs, but the rally now appears to be cooling. Platinum prices also remain near a one-year high.
