Gold prices weakened slightly on Thursday (August 21st) after the minutes of the US Federal Reserve's July meeting showed a majority consensus to keep interest rates on hold, as investors awaited the central bank's annual Jackson Hole symposium later for further policy guidance.

Spot gold prices fell 0.2% to $3,340.09 per ounce, as of 08:02 GMT. US gold futures for December delivery also fell 0.2% to $3,382.30.

The minutes of the Fed's July meeting showed that policymakers who disagreed with last month's decision to keep interest rates on hold – Vice Chair Michelle Bowman and Governor Christopher Waller – were the only ones advocating for a rate cut.

"The FOMC minutes were hawkish, and the Fed board remains likely to prioritize controlling inflation by maintaining a tight monetary policy rather than cutting the cost of money," said Carlo Alberto De Casa, an external analyst at Swissquote. Non-yielding gold typically performs well in a low-interest rate environment.

The Fed has held interest rates steady since December, although investors still price in an 81% chance of a quarter-point cut in September, according to the CME FedWatch tool. Fed Chairman Jerome Powell is expected to speak on Friday at the Jackson Hole symposium from August 21-23, with investors watching to see whether he supports measures to strengthen the labor market or focuses on controlling inflation.

"A hawkish Fed could impact gold prices, but as long as gold remains in the $3,270-$3,440 range, there's not a significant risk of a sharp decline (given) the central bank is still buying tons of gold," De Casa added. Meanwhile, President Trump urged Fed Chair Lisa Cook to resign over allegations made by one of his political allies about mortgages she held, further strengthening his efforts to influence the central bank. Cook said that Lisa "has no intention of being intimidated into resigning" from her post.

China's central bank added gold to its reserves in July, the ninth consecutive month of gold purchases, official data showed earlier this month. Spot silver fell 0.2% to $37.83 an ounce, platinum fell 1% to $1,326.93, and palladium fell 0.8% to $1,105.12. (alg)

Source: Reuters