Gold prices pegged to 6-week lows due to Fed minutes

Gold prices edged past a six-week low on Wednesday with a cautious market mood ahead of the Fed's February circular, while some stronger-than-expected U.S. economic data further supported the dollar to rise. investing.com Gold prices traded in a tight range during the week amid renewed concerns over the Fed's hawkish moves, especially after inflation readings that also strengthened from expectations for January. This is coupled with signs of a sustained US economy, giving the Fed enough room to continue raising interest rates.

Spot gold remained flat at around $1,835 an ounce, while gold futures rose 0.1% to $1,844 an ounce based on data that was updated at 7:13 p.m. ET. The widely released Fed circular is expected to repeat the bank's hawkish rhetoric.

The focus this week is also on the personal CPI reading that will take place on Thursday which is a gauge of Fed inflation options. The result of rising interest rates bodes ill for non-yielding assets such as gold and other precious metals, as it raises the price of the dollar and Treasury yields and increases the opportunity cost for gold. Signs of resilience in the U.S. economy give the Fed more room to hold on to the rate hikes that the bank has signaled it will do for the short term. However, concerns over the U.S. slowdown persisted, especially other data showing that the housing market was under pressure on Tuesday. 

Other precious metals were kept in a tight range on Wednesday. Platinum futures also rose 0.1% an ounce to $945.95, while silver futures edged up $21,900 an ounce. The metals industry was boosted by the better-than-expected U.S. PMI, followed by copper futures that rose sharply on Tuesday. High-quality copper futures hovered around a 3-week high of $4.217 a pound on Wednesday, after the previous session rose by 0.8%. The red metal (copper) was also supported by some optimism about the economic recovery in China, especially after the country kept interest rates at record lows this week. 

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