Gold prices eased on Wednesday to hover around the $1,500 level as investors turned cautious ahead of minutes from the U.S. Federal Reserve's last meeting, which is expected to shed more light on interest rate cuts.
Spot gold was down 0.5% at $1,499.18 per ounce by 0948 GMT, with analysts also attributing the dip to profit-booking following the metal's recent strong run, which saw it gain more than $80 this month.
U.S. gold futures slipped 0.4% to $1,509.70.
"The market is nervous while it waits for further cues on the outcome of the Fed meeting minutes" said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
However, "fundamentals for gold remain positive as central bankers have increased their gold reserves amid geopolitical tension, trade spats and signals of stimulus."
Minutes from the Federal Open Market Committee's most recent meeting in July - when the U.S. central bank cut interest rates for the first time in a decade - are due on Wednesday.
Traders are also awaiting the central bank's annual Jackson Hole seminar later this week with major focus on a scheduled speech by Fed Chair Jerome Powell.
Powell's comments are of particular interest after last week's inversion of the U.S. yield curve - widely regarded as a recession signal - boosted expectations the Fed would lower interest rates at its September policy meeting.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
"Gold is declining below $1,500, confirming the consolidation phase that has taken place in the last few days," ActivTrades analyst Carlo Alberto De Casa said in a note.
"Despite this, the main trend remains bullish, with further rallies that seems likely in the medium term, while in the short term the scenario is lateral, with prices that could draw a lateral range between $1,475 and $1,530."
On the trade front, U.S. President Donald Trump said on Tuesday he had to confront China over trade even if it caused short-term harm to the U.S. economy.
The escalation in the trade war between the world's biggest economies and an increasingly dovish shift in policy by central banks have contributed to a more than 6% rise in gold this month.
Indicative of sentiment, holdings of SPDR gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.2% to 845.17 tonnes on Tuesday from Monday.
Among other precious metals, silver eased 0.2% to $17.09 per ounce, while platinum dropped 1% to $840.07.
Palladium edged 0.1% lower to $1,489.76 per ounce.
Gold rates for Wednesday, August 21, 2019
Emirates 24|7 brings you the daily Dubai gold rate (22k, 24k, 21k and 18k), as well as currency exchange rates, including the Indian rupee, Pakistani rupee, Philippine peso, Sri Lankan rupee, sterling pound, euro and may more against the UAE dirham (US dollar).
The rates for 24 carat, 22 carat, 21 carat, 18 carat and Ten Tola (TT) Bar (11.6638038 gram) will be updated four times a day to keep them fresh and relevant for buyers of gold bars and gold jewellery in the UAE.
The update times for Retail Gold Rate in Dubai will be at 9.30am, 2.30pm, 5pm and 8pm (unless there is drastic fall or rise in the international rate).
On Saturdays, the gold rates will be updated at 9.30am and this rate will stay static through Saturday and Sunday until the international market reopens on Monday.
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The Retail Gold Rate in Dubai is being supplied by the Dubai Gold and Jewellery Group.
Foreign Exchange Rates
The Foreign Exchange Rates of major currencies will be updated twice each working day at around 8:30am and 3:30pm.
These will cover both the Remittance Rates [for sending money] and the Currency Notes Rates [for buying and selling of currency notes].
The Foreign Exchange Rates are being supplied by UAE Exchange.