Gold retreats as the U.S. stock market strengthens, traders await Fed minutes for clues on interest rates

Gold retreats as the U.S. stock market strengthens, traders await Fed minutes for clues on interest rates

Fed will publish minutes of July 30-31 meeting at 2 p.m. ET

Gold futures inched lower on Thursday, as strength in the stock market dulled investor interest in the metal, ahead of the publication of minutes of the Federal Reserve’s July meeting, which could provide a catalyst gold prices.

Gold was slightly down in Wednesday dealings “because of strong earnings numbers from Home Depot HD, +0.15%, Lowe’s LOW, -0.59%, and Target TGT, +1.26%, which are positive indicators for the economy and consumer and not supportive of gold,” said James Hatzigiannis, senior commodities associate at Long Leaf Trading Group. Against that backdrop, benchmark U.S. stock indexes traded broadly higher.

“Essentially, all that recession talk from last week has died down as well,” said Hatzigiannis.

Gold for December delivery GCZ19, -0.40% was off $1.20, or 0.08%, at $1,514.50 an ounce, after gaining 0.3% on Tuesday; while September silver SIU19, -0.38% shed 3.3 cents, or 0.2%, to trade at $17.115 an ounce, following a 1.2% jump in the previous session.

The Fed will publish the minutes of the July at 2 p.m. Eastern Time, a half hour after gold futures settle for the session. Investors are hoping for clues on how split the members of the Federal Open Market Committee were on last month’s decision to lower rates by a quarter percentage point, the first such move in more than decade. The minutes also come ahead of the Thursday start to the Fed’s annual symposium of central bankers in Jackson Hole, Wyo., which would could affirm market-based expectations for a rate cut at the end of the Fed’s next two-day policy meeting on Sept. 17-18.

From the FOMC minutes, “we will definitely be looking for any tips on rate cuts and the timing of them,” said Hatzigiannis. “We are expecting to see them state what they always have, and that is we will make adjustments if necessary. They do not want to violently move the markets.”

Metals have benefited from their perception as safe haven assets, gaining altitude amid a flurry of worries about the health of the economy inside and outside of the U.S.

Technical analysts are anticipating that precious metals will retain their bullish tilt, despite edging lower Wednesday.

“The main trend remains bullish, with further rallies that seems likely in the medium term, while in the short term the scenario is lateral, with prices that could draw a lateral range between $1,475 and $1,530,” wrote Carlo Alberto De Casa, chief analyst at brokerage ActivTrades, in a Wednesday research note.

He said, however, that any moves “below or above these thresholds could trigger of a new directional movement.”

Among other metals traded on Comex, September copper HGU19, -1.43% was up nearly a penny, or 0.3%, at $2.5845 a pound, after shedding 0.9% on Wednesday. October platinum PLV19, -0.05% tacked on $3.80, or 0.5%, to $856.60 an ounce, while September palladium PAU19, +0.83% shed $28.30, or 1.9%, to $1,461.40, easing back after a 1% gain on Tuesday.

The SPDR Gold Shares exchange-traded fund GLD, -0.08%, traded down 0.2%, contributing to a 0.6% loss so far this week, while the iShares Silver Trust SLV, -0.09% traded flat in Tuesday dealings, up 0.2% week to date.

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