LONDON: Gold steadied on Wednesday after its biggest one-day slide in 2-1/2 months as investors awaited Federal Reserve policy meeting minutes for clues on the outlook for US interest rates.

But prices were still under pressure from fresh gains in the dollar that kept the metal near a one-week low.

Spot gold was at $1,327.81 an ounce at 1235GMT, down 0.1 per cent but off an earlier low of $1,325.20.

US April gold futures were down 80 cents an ounce at $1,330.40. “With both the dollar recovering and real yields staying as elevated as they are, that is creating some nervousness (in gold),” Saxo Bank’s head of commodity research Ole Hansen said. “Also, the FOMC minutes raise some concerns - the market is more worried about an accelerated rate hiking cycle than any slowdown. The market will be looking to the minutes for further guidance,” he said.

Gold slid 1.3pc on Tuesday, the most on any day since Dec 7, as a rise in US yields boosted the dollar and weakened the appeal of non-interest bearing gold. Benchmark 10-year Treasury yields hovered near a four-year peak on Tuesday.

On the investment side of the market, holdings at the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares , rose 3.2 tonnes on Tuesday to 827.79 tonnes.

Among other precious metals, silver was down 0.2pc at $16.42 an ounce, while palladium was 1.3pc lower at $1,020 and platinum was down 0.5pc to $995.20.

Published in Dawn, February 22nd, 2018