Investing.com - Gold prices were lower in European trade on Wednesday, as investors looked ahead to minutes of the Federal Reserve’s latest policy meeting due later in the global day for further hints on the timing of the next U.S. rate hike.
Comex gold futures shed $6.20, or around 0.5%, to $1,249.21 a troy ounce by 3:25AM ET (07:25GMT). Meanwhile, spot gold was at $1,249.52.
Prices of the yellow metal lost around $6.00 on Tuesday, as the U.S. dollar pulled away from recent six-and-a-half-month lows.
The Fed will release minutes of its most recent policy meeting at 2:00PM ET (18:00GMT), as traders seek further insight into the likelihood of higher interest rates in the months ahead. The publication is also expected to provide some details on the Fed's discussions about shrinking its massive $4.5 trillion balance sheet.
The U.S. central bank left interest rates unchanged following its meeting on May 3 and gave a positive assessment of the U.S. economy, suggesting it was still on track for two more rate hikes this year.
But a recent run of disappointing U.S. economic data combined with signs of deepening political turmoil in the White House raised doubts over the Fed's ability to raise rates as much as it would like before the end of the year.
Futures traders are currently pricing in around an 80% chance of a hike at the Fed's June meeting, according to Investing.com’s Fed Rate Monitor Tool, while odds for a second rate hike by December were at about 40%.
The dollar index, which tracks the greenback against a basket of six major rivals, was at 97.32 in London morning trade. It fell to the lowest since November 9 at 96.70 at the start of the week, as political uncertainty surrounding the Trump administration pressured the dollar lower.
Investor sentiment has been hit by fears that the U.S. political system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending reforms.
Also on the Comex, silver futures declined 17.3 cents, or about 1%, to $16.96 a troy ounce
Elsewhere in metals trading, platinum slipped 0.8% to $941.60, while palladium dipped 0.2% to $770.58 an ounce.
Copper futures lost 0.9 cents to $2.587 a pound.
Moody's Investors Service downgraded China's credit ratings on Wednesday by one notch to A1 from Aa3, citing expectations that the financial strength of the world's second-biggest economy would erode in the coming years as growth slows and debt continues to rise.