Gold Treads Water Pending Additional Fed Hints

Gold prices hovered slightly around six-week lows on Tuesday, as traders waited for more monetary policy clues from the Federal Reserve's February meeting minutes before placing large wagers.

This week, markets were also anticipating a spate of Fed speakers, as hot U.S. inflation and a robust labor market put the central bank's policies in the spotlight.

Although U.S. markets were closed on Monday for a holiday, trading on gold and other metals has been limited so far this week. The continued demand for the dollar in Asian and European trade capped the price of metal.

At 20:32 ET, spot gold was unchanged at $1,841.59 per ounce, and gold futures were slightly changed at $1,850.25 per ounce (01:32 GMT). Both assets have suffered three consecutive weeks of losses.

Hotter-than-expected The recent gain in gold prices was abruptly halted by the U.S. inflation data as investors sharply reviewed their expectations for interest rate hikes this year.

The Fed has sufficient motivation to continue to raise interest rates due to persistent inflation and indicators of a robust labor market. Wednesday's release of the minutes from the Fed's February meeting is expected to confirm the central bank's hawkish position.

An increase in U.S. Treasury yields and the value of the dollar weighted hard on non-yielding assets such as gold and other metals. With U.S. yields and interest rates expected to grow further in tandem, the near-term picture for gold remained bleak, as Fed officials cautioned that U.S. interest rates could surpass 6% this year.

Gold and other precious metals could profit from safe-haven buying later in the year, particularly if slower economic growth pushes the Federal Reserve to reverse its hawkish strategy.

On Tuesday, prices for other precious metals were modest. Futures for platinum increased 0.2% to $929.40 per ounce, while futures for silver decreased 0.2% to $21.780 per ounce.

Copper prices declined marginally on Tuesday, following a 1.5% increase in the previous session, despite persistent optimism on China's economic rebound.

Futures for high-grade copper dipped 0.1% to $4.1730 per pound.

Monday's decision by the People's Bank to maintain historically low mortgage rates bolstered optimism for a Chinese economic revival. Although the action was widely anticipated, it showed that the administration intended to maintain accommodating policies to stimulate economic growth.