Federal Reserve minutes suggest openness to rate hikes, putting pressure on gold prices to decline

⑴ The Federal Reserve minutes indicate that if the Iran war continues to intensify inflation, most officials will remain open to possible interest rate hikes. Subsequently, gold prices fell. New York gold futures dropped by 0.4% to $4,517.20 per ounce.⑵ Analysts from Mitsubishi UFJ stated: “In recent weeks, gold prices have traded within a relatively narrow range and have still declined by about 14% since the outbreak of the war at the end of February.” However, after the U.S. president said both parties are in the final stage of negotiations, renewed optimism over a potential US-Iran agreement limited further declines in gold prices.⑶ Market observers noted that gold prices may need to see a significant easing of oil-driven inflationary pressures, or new evidence that risks of economic growth slowdown are beginning to outweigh concerns over inflation, in order to regain upward momentum.