LONDON — Gold prices eased towards $1,580 an ounce on Wednesday as traders took to the sidelines ahead of the release later in the day of minutes from the Federal Reserve’s last policy meeting. Softer investor confidence in the metal after a fresh outflow from the world’s largest gold exchange-traded fund and a further forecast cut from Goldman Sachs weighed on prices, though a retreat in the dollar lent some support. Spot gold was down 0.3% at $1,580.50 an ounce at 9.23am GMT, while US gold futures for April delivery were down $6.20 an ounce at $1,580.50. The precious metal traded in its widest weekly range since mid-February last week, sliding to a 10-month low at $1,539.74, as funds favoured other assets such as equities, before rebounding sharply on the back of weak US jobs data. "I think today will be a bit of a sideways day waiting for the Federal Reserve minutes," Marex Spectron precious metals head David Govett said. "The market just got itself overly short. There was a lot of speculative selling around in gold. Funds bailed out and got a little bit short, and a lot of people were following the ETF (exchange-traded fund) redemptions," he said, adding much will now depend on the outlook for US monetary policy. The Fed is due to release minutes of its March 19-20 meeting at 6pm GMT. They will be closely watched for signs of any change in attitude towards its current stimulus package, which has driven gold higher by undermining confidence in the dollar and keeping interest rates at rock bottom. "Investors will be mainly scouring the minutes for any new indications of when QE3 might be terminated, or of any significant reduction in the bond purchasing volume," Commerzbank said in a note. "Following last week’s poor US labour market report, however, a premature end to QE3 would appear to have become less likely," it added. US Treasuries held steady and US stock futures rose ahead of the release. Stock markets in Europe climbed as Chinese trade data boosted miners, while the euro hit a one-month high against the dollar. Goldman Sachs cuts forecast Goldman Sachs cut its 2013 gold price forecast for the second time in six weeks, to $1,545 an ounce from $1,610. It is targeting a gold price of $1,450 an ounce by year-end, it said. "Despite resurgence in Euro area risk aversion and disappointing US economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning," it said in a report. "With our economists expecting few ramifications from Cyprus and that the recent US slowdown will not derail the faster recovery they forecast in (the second half of 2013), we believe a sharp rebound in gold prices is unlikely." The world’s largest gold-backed exchange-traded fund, New York’s SPDR Gold Trust, reported a further outflow from its gold holdings on Tuesday of just under five tonnes, bringing its outflow for the year to more than 150 tonnes. Gold-backed ETFs tracked by Reuters have recorded outflows of 195 tonnes so far this year. Among other precious metals, silver was down 0.6% at $27.75 an ounce. The grey metal rallied 2.5% on Tuesday, its biggest one-day rise since mid-February. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, pulled back from last week’s eight-month high as silver outperformed. An ounce of gold now costs 56.8 ounces of silver, down from 57.9 on Friday. Spot platinum was down 0.7% at $1,535.93 an ounce, while spot palladium was down 1% at $715.97 an ounce.

Source