Gold Retreats from Historic Highs Ahead of Fed Minutes Release

Gold prices declined in European trade on Wednesday, marking the second consecutive loss and retreating from record highs due to profit-taking as the dollar strengthened against major currencies.

Traders are now anticipating the Federal Reserve's latest meeting minutes, which are expected to provide new insights into the timing of potential US rate cuts.

The Price:

Gold prices fell 0.4% to $2,410 an ounce, after reaching a session-high of $2,426. On Tuesday, the precious metal dropped 0.25%, its first loss in three days, moving away from a record high of $2,450.

The Dollar:

The dollar index increased by 0.15% on Wednesday, marking its fifth consecutive session of gains against a basket of major currencies.

A stronger dollar makes gold futures, which are priced in dollars, more expensive for holders of other currencies. These gains followed bullish comments from Fed officials, which also pushed up US 10-year treasury yields.

Fed official Christopher Waller stated on Tuesday that he needs to see several months of positive inflation data before supporting policy easing.

US Rate:

The probability of a 0.25% rate cut by the Fed in July is 18%, and 61% for September, according to the Fedwatch tool. Investors expect the Fed to implement two 0.25% rate cuts this year.

Federal Reserve:

The Federal Reserve is set to release the minutes from its May meeting later today.

During that meeting, the Fed maintained interest rates at just below 5.5% and indicated that rate cuts are unlikely until there is greater confidence that inflation is moving towards the 2% target.

Fed Chair Jerome Powell stated that monetary policy is expected to remain restrictive for some time until inflation is firmly under control, but he does not anticipate the next policy move to be a rate hike.