London - The minutes of the Fed's July 30-31 meeting, released on Wednesday, showed that a few officials thought last month it would soon be time to slow the pace of their bond buying “somewhat”, though others advised patience.
Bullion prices fluctuated after the minutes were released, before succumbing to pressure from a rising dollar and bond yields to end Wednesday lower.
They have since steadied, however, as physical bullion buyers stepped in, analysts said.
Spot gold was flat at $1,365.56 an ounce at 12:33 SA time, while US gold futures for December delivery were down $4.30 an ounce at $1,365.80.
“You would expect that after the minutes, the gold price would be slightly lower. But this is not what is happening at the moment,” Karim Cherif, an analyst at Credit Suisse, said.
“What is interesting in gold prices right now is actually what is happening on the physical side. There is still substantial buying in the physical market.”
The dollar was up 0.5 percent against a basket of currencies after the news of the Fed minutes, while the US 10-year Treasury yields set a fresh two-year high of 2.936 percent.
In June, Fed Chairman Ben Bernanke said the bank expected to trim stimulus later this year and to halt it by mid-2014.
Expectations that the Fed's quantitative easing policy - which helps support gold by maintaining pressure on interest rates while stoking fears over inflation - will be reined in has helped knock gold prices down by nearly a fifth this year.
SOUTH AFRICAN MINERS THREATEN STRIKE
Traders say that strong demand from the major Asian gold consumers, notably China, and a reversal of outflows from gold-backed exchange-traded funds could give the metal a boost.
Jitters over precious metals supply are also rising in South Africa, source of three out of four ounces of the world's platinum and the world's sixth largest gold producer.
South Africa's labour unrest widened on Thursday as tens of thousands of construction workers prepared to down tools next week and unions in the gold sector also signalled their intention to call a strike over wages.
Platinum was up 0.4 percent at $1,512.72 an ounce, while palladium was up 0.6 percent at $745.72 an ounce.
“Platinum continues to be supported by supply risks out of South Africa,” UBS said in a note. “With wage negotiations still dragging on, it is still too early to rule out any disruptions.”
“But the fact that there have been no sizeable production cuts so far suggests downside price risks are starting to build, as 2013 output could end up being higher than what the market expected at the beginning of the year,” it added.
Switzerland remained a net importer of platinum for a second month in July, data from the Swiss customs bureau showed on Thursday, although shipments both into and out of the country dropped from the previous month.
Silver was up 0.7 percent at $23.01 an ounce. - Reuters