By Ambar Warrick
Investing.com– Gold prices moved little on Wednesday as investors avoided big bets ahead of key U.S. inflation data this week, while the minutes of the Federal Reserve’s September meeting were also in focus.
fell 0.1% to $1,664.82 an ounce, while fell $2 to $1,671.45 an ounce by 19:29 ET (23:29 GMT). Both instruments moved little on Tuesday after falling sharply at the beginning of the week.
Bullion prices are now back below the key support level of $1,700, as pressure from the dollar increased amid more hawkish signals from the Federal Reserve. , due later in the day, are also expected to reinforce the Fed’s stance, given that the central bank raised interest rates by 75 basis points and warned that it was willing to risk some economic headwinds from higher rates, as it moves to control inflation.
U.S. inflation data for September is also a key point of focus for metal markets this week. data is due later on Wednesday, and is expected to show that price headwinds for manufacturers persisted last month.
, the more closely-watched inflation gauge, is due on Thursday, and is expected to show inflation remained pinned near 40-year highs last month. Both readings, coupled with strong jobs data last week, are expected to give the Fed enough impetus to keep raising interest rates at a sharp pace.
Gold prices plummeted this year, recently sinking to a two-year low as rising interest rates across the globe increased the opportunity cost of holding the yellow metal. This trend is expected to continue as long as high inflation persists.
Weakening appetite for bullion also robbed it of its safe haven status this year, with the largely overtaking gold and other precious metals.
Among industrial metals, were largely unchanged around $3.4227 a pound. The red metal saw a strong start to the week as Chinese markets reopened after a long holiday.
Markets are now wary of any new lockdown measures in China that could potentially stifle demand, after a resurgence in COVID cases in the country. Focus is also on the announcement of any major stimulus measures during the 20th National Congress of the Communist Party later this week.
Markets are also awaiting Chinese and , due on Friday, for more cues on a potential economic recovery.