Gold prices edged lower on Tuesday as investors turned their attention to the minutes of the U.S. Federal Reserve’s June policy meeting for fresh signals on the path of interest rates, while the precious metal retained most of the gains recorded last week.
Spot gold traded around $4,126 per ounce, down about 0.9% on the day after briefly climbing to a two-week high earlier this week. Gold futures also eased as traders awaited greater clarity on the U.S. central bank’s policy outlook.
Market participants are looking to the Federal Open Market Committee (FOMC) minutes, due on Wednesday, for indications of how policymakers are assessing inflation, economic growth and the timing of any further interest rate increases.
Gold has found support in recent days after weaker-than-expected U.S. labour market data reduced expectations that the Federal Reserve would tighten monetary policy in the near term. June employment growth slowed sharply, while payroll figures for the previous two months were revised lower, prompting investors to trim expectations of a September rate increase.
According to market pricing, traders now see roughly a 50% to 56% probability of a September rate hike, down from about two-thirds before last week’s employment report. Lower interest rate expectations generally support gold because the metal does not pay interest, making it relatively more attractive when borrowing costs are expected to remain lower.
The precious metal also drew support from easing energy prices. Oil markets remained under pressure as shipping through the Strait of Hormuz continued to recover following the interim U.S.-Iran peace agreement, while Middle Eastern producers increased output and OPEC+ agreed to raise production quotas next month, helping to ease concerns over global energy supplies.
Despite Tuesday’s decline, gold remains substantially higher over the longer term. The metal was trading at $4,123.71 per ounce, down 0.99% from the previous session. It has fallen 4.48% over the past month but remains nearly 25% above its level a year ago, underscoring continued investor demand amid economic and geopolitical uncertainty.
