Gold prices saw a dip in Asian trading as investors focused on the release of the U.S. Federal Reserve's July meeting minutes. The minutes revealed that a majority of Federal Open Market Committee (FOMC) participants favored continued interest rate increases to combat inflation.
The minutes from the July 25-26 meeting indicated that policymakers generally agreed that more needed to be done to bring inflation back to the Fed's 2% target. While a couple of officials might have dissented or had reservations about further hikes, the overall sentiment pointed toward a restrictive monetary policy remaining in place.
This stance by the Federal Reserve typically strengthens the U.S. dollar and increases yields on U.S. Treasury bonds, both of which tend to make dollar-denominated assets like gold less attractive to foreign buyers. Higher interest rates also increase the opportunity cost of holding non-yielding assets such as gold.