Gold falls from highs

LONDON (May 23) The price of gold fell to $2370.00 per troy ounce by Thursday following the release of the minutes from the latest US Federal Reserve meeting. The general tone of the Fed's policymakers was notably cautious, aligning with previous calls for a restrained approach to monetary policy.

The Fed indicated that more time is needed to be confident that US inflation is declining towards the 2% target. This cautious sentiment has tempered market expectations of imminent interest rate cuts. Previously, the market anticipated two rate cuts (in September and December); now, it expects no more than one. Consequently, the US interest rate is likely to remain at 5.5% per annum for an extended period before the Fed considers revising it.

Higher interest rates reduce the attractiveness of gold, which does not yield interest. This dynamic has contributed to the recent decline in gold prices.

Investing.com