Investing.com – Gold prices pulled back from the prior session’s 10-month high on Thursday, as markets continued to digest minutes from the Federal Reserve’s last meeting, which revived expectations for a possible U.S. rate hike this year.
Signs that the U.S. and China would hammer out an agreement resolving their protracted trade war also weighed.
Comex were down $9.85, or around 0.7%, at $1,338.10 a troy ounce by 7:40AM ET (12:40 GMT). It rose to $1,349.80 on Wednesday, the best level since May 2018.
Meanwhile, was trading at $1,335.47 per ounce, down $2.95, or roughly 0.2%.
The Fed, in the minutes of its latest meeting in January, said the U.S. economy and its labor market remained strong, prompting some expectations of at least one more interest rate hike this year.
Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.
“The dollar drew some lift as the minutes appeared to have appeased market participants who were clinging to views that the Fed would hike rates one more time this year – but all in all, the minutes were in line with what the Fed said in January,” said Daisuke Karakama, chief market economist at Mizuho Bank.
The , which measures the greenback’s strength against a basket of six major currencies, was at 96.33, well off a two-week low of 96.12 reached in the previous session.
Meanwhile, markets will be keeping abreast of ongoing trade discussions between the U.S. and China in Washington, as the two sides race to reach a deal that would avert a tariff increase on Chinese goods by March 1.
Negotiators are drawing up six memorandums of understanding on structural issues: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to two sources familiar with the progress of the talks.
The developments mark the most significant progress yet toward ending a seven-month trade war between the world’s two largest economies.
In other metals trading, sank 27.5 cents, or about 1.7%, to trade at $15.90 a troy ounce.
Meanwhile, dropped 1.5% to $1,439.80 an ounce. The metal had surpassed the crucial $1,500 psychological level the previous session, on market supply woes.
— Reuters contributed to this report
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