Fed Minutes Suggest Slower Rate Hikes, Which Boosts Gold Prices

The Federal Reserve's December meeting minutes showed that officials favored raising interest rates at a slower pace, easing metal markets hit by rising borrowing costs. Gold prices hit a seven-month high Thursday.

The possibility of fewer interest rate hikes by the Federal Reserve weighed on the dollar, encouraging more bets that the currency peaked in 2022 and will continue to fall. After the minutes were disclosed, Treasury rates dropped.

The Fed minutes showed that officials are hyper-focused on controlling inflation and want to keep interest rates high for a long time. This may limit metal market gains.

Spot gold rose to $1,855.45 per ounce, while gold futures remained constant at $1,860.80 per ounce as of 19:26 ET (00:26 GMT). Both assets have gained over 2% in the last two days.

Bullion prices rose after the IMF warned that the world's leading countries could endure a recession in 2023.

Metal markets fell as the global economy slowed. After a poor start to the year, copper prices fell for a third day.

Copper futures declined 0.1% in early Asian trading to $3.7412 per pound, down about 2% since 2022.

Uncertainty about China's economic openness weighed on the red metal as the world's largest copper importer faced a COVID-19 outbreak.

Copper demand is expected to surge once the Chinese economy reopens, but prices will be volatile as the timeframe is uncertain.

Other big economies' slowing growth also pressured for industrial metals. The U.S. manufacturing sector dropped for the second consecutive month in December, according to data released Wednesday.

Nickel prices plummeted 6% after the U.S. reading, while platinum and silver prices also declined.