Gold sinks ahead of Fed minutes

Gold sank to its lowest level in more than five years on Wednesday, before the release of minutes from the Federal Reserve’s latest policy meeting that yield more clues about the chances of a rate hike next month.

On the Comex in New York, gold futures for December delivery slipped to $1,062 per troy ounce.

That was its weakest since February 2010 and came as US inflation data appeared to support the case for the Fed to raise rates at its next meeting in December.

The US Commerce Department reported that consumer prices rose by 0.2 per cent last month, which was in line with expectations and a sign that price growth is beginning to pick up.

Last month’s meeting saw the Fed leave rates on hold, but a surprising hawkish statement left markets upbeat on chances it will finally pull the trigger in December.

As gold fell, the dollar eased away from recent peaks but remained close to seven-month highs versus its major peers.