Gold prices headed lower on Thursday, with bullion threatening to snap a fivesession streak of gains the longest stretch so far this year a day after minutes from the Federal Reserves April meeting suggested that the central bank is contemplating when it will begin scaling back monetarypolicy support for the economy.
Gold began to move lower in electronic trade Wednesday after minutes from the Federal Reserves April meeting, released after gold futures settled, showed that members of the Federal Open Market Committee agreed that any price increases from bottlenecks are likely to only have transitory effects on inflation.
The minutes also implied, however, that the FOMC may be moving toward discussing a pathway toward rolling back some of its pandemicera accommodations as the economy rebounds from COVID19.
Investors took big steps over the past few days toward recognizing golds traditional role as the preeminent hedge against inflation and currency depreciation, said Brien Lundin, editor of Gold Newsletter.
The next stop, still untaken, will be to recognize that, yes, Fed rate hikes are coming, but when they come, theyll remain far behind the rate of inflation, because they have to be, he told MarketWatch shortly after the release of the Fed minutes.
As that understanding takes hold, investors will find gold remains the best way to protect their assets against the higher rates of inflation, said Lundin.
June gold fell 4, or 0.2, to 1,877.50 an ounce, following a…