Gold inches lower, investors wait for Fed's June meeting minutes

Gold prices edged slightly lower in early Asian trade on Tuesday, as traders awaited the U.S. Federal Reserve's minutes of the June meeting for more clues on its interest rate hike path ahead.

FUNDAMENTALS

* Spot gold edged 0.1% lower to $1,919.95 per ounce by 0107 GMT, while U.S. gold futures were down similarly to $1,927.80.


* The dollar index held steady.

* Trading volume could be light due to a U.S. holiday.

* U.S. manufacturing slumped further in June, with ISM's manufacturing PMI dropping to 46.0 last month, the lowest reading since May 2020, from 46.9 in May.

* Yet price pressures at the factory gate continued to deflate since bottlenecks in the supply chain have eased considerably and higher borrowing costs dampen demand.

* Investors see an 87% chance of a 25-basis-point hike in July, according to CME's Fedwatch tool, bringing rates into the 5.25%-5.50% range before cuts are seen after March in 2024.

* Investors will watch for minutes of the June 13-14 FOMC meeting being released on Wednesday.

* High interest rates discourage investment in non-yielding gold.

* Japan's top financial diplomat Masato Kanda said on Tuesday that authorities were in close contact with U.S. Treasury Secretary Janet Yellen and other overseas authorities, in lieu of the yen falling to a near eight-month low against the dollar last week.

* Spot silver fell 0.1% to $22.86 per ounce, platinum rose 0.6% to $911.52 while palladium jumped 1.4% to $1,245.95.

DATA/EVENTS (GMT) 0430 Australia RBA Cash Rate July 0600 Germany Exports, Imports MM SA May 0600 Germany Trade Balance, EUR, SA May