NEW YORK—Gold prices soured as investors found few hints of new easy money measures in the Federal Reserve's meeting minutes, with the precious metal facing additional pressure from a sharply weaker euro.
The most actively traded contract, for August delivery, was recently down $17.90, or 1.1%, at $1,557.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
The minutes of the Fed's June policy-setting meeting showed the governors were split as to whether the U.S. economy required more monetary easing.
This disappointed gold traders, who had hoped to see hints of impending stimulus measures. Gold prices have benefited from the Fed's past liquidity injections, as fears of future inflation triggered a rush to store of value assets like gold.
However, with no new stimulus in sight and inflation remaining in check in the euro zone, the U.S. and China, "bullion's inflation hedge properties are also off the radar," said Andrey Kryuchenkov, an analyst with VTB Capital, in a note to clients.
Gold faced added pressure from the euro, which broke below $1.22 and slumped to a fresh two-year low. Gold futures are priced in dollars and become more expensive for investors using other currencies when the dollar strengthens.
Investor interest for physical gold also remains lackluster, said traders at TD Securities in a note to clients.
"We have seen very little in the way of physical demand lately and even the usual Asian buyers have been notably absent," they said.
Silver prices followed gold cues, sliding 1.9% to $26.520 a troy ounce for the September contract in recent trade.
"Silver is performing even worse today and again the lack of demand at these lower levels merits attention and we eye the $25.90 area as key to its long term prospects," TD Securities said.
