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Fed minutes are due at 1800 GMT*, according to 2 Minute Read. 10-year Treasury yields are at a four-month low*. In June, the service sector in the United States slowed (Recasts, adds comments, updates prices) Reuters, 7 July – Gold prices surged on Wednesday, supported by a reduction in U.S. Treasury yields, to a three-week high, as investors anticipated the release of minutes from the Federal Reserve’s June meeting for indications on policy direction. As of 0251 GMT, spot gold was up 0.2 percent at $1,800.42 per ounce, following reaching its highest level since June 17 at $1,814.78 on Tuesday. Gold futures in the United States climbed 0.4 percent to $1,800.50 per ounce. “A drop in Treasury yields is obviously supporting gold, and we are also seeing some minor weakness in the US currency during early morning trading, which will further help,” ING analyst Warren Patterson said. The benchmark 10-year Treasury yield was approaching its lowest level in over four months. The opportunity cost of owning non-interest bearing gold is reduced as bond yields fall. Following a 0.4 percent rise in the previous session, the dollar index was marginally lower at 92.515. Market players are now waiting for minutes from the Fed’s most recent meeting, which are due at 1800 GMT and could give more information on the interest rate trajectory following the central bank’s hawkish shift last month. “I believe these (minutes) will just reaffirm the Fed’s shift toward hawkishness, and (we) may see gold trading lower as a result,” ING’s Patterson said. The potential cost of storing non-yielding bullion increases when interest rates in the United States rise. According to a poll, service industry activity in the United States rose at a sluggish pace in June, possibly due to labor and raw material constraints, resulting in unfinished work piling up. Silver was unchanged at $26.14 per ounce, palladium was down 0.3 percent to $2,783.73, and platinum was down 0.5 percent to $1,086.49. (Brijesh Patel in Bengaluru contributed reporting; Subhranshu Sahu edited the piece.)/nRead More

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