Investing.com – Gold prices turned negative Wednesday, but remained near multi-month highs as the dollar pared losses despite the Federal Reserve signalling it was preparing to stop trimming its balance sheet later this year.
fell by $0.85, or 0.05%, to $1,344.15 a troy ounce, but remained near 14-month highs.
Gold prices struggled to hold gains as the dollar inched higher, even as expectations for more dovish policy action from the Fed were given boost.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.07% to 96.28, but remained above session lows of 96.12.
“Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve’s asset holdings later this year,” the minutes showed.
The Fed has been allowing as much as $50 billion a month of maturing securities to roll off its balance sheet, which peaked at roughly $4.5 trillion in Jan. 2015, but has now narrowed to about $4 trillion.
In a sign that rates will remain lower for longer the minutes noted that participants viewed “the current target range for the federal funds rate for a time posed few risks at this point.”
In a weaker interest rate environment, investor appetite for gold strengthens as the opportunity cost of holding the precious metal decreases relative to other interest-bearing assets such as bonds.
Other precious metals remained in the green despite the rise in the dollar.
rose 0.77% to $16.09 a troy ounce, while rose 1.35% to $832.00.
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