Gold inter-markets: awaits FOMC meeting minutes for fresh impetus

Gold jumped to a 7-day high level of $1358 primarily led by the ongoing US Dollar sell-off across the board, which got aggravated following the release of US CPI report. The precious metal's last leg of up-move on Tuesday was further supported by a sudden spike in the Volatility Index (VIX) that led to a slide in the broader US equity index (S&P 500). 

However, comments from William Dudley, President of the Federal Reserve Bank of New York, that the Fed is moving closer to a rate-hike at its September meeting triggered a near-term short-covering bounce in the greenback, as depicted by a swift recovery in the USD/JPY major. Maintaining its negative correlation, Gold trimmed its gains with a broad based recovery in the greenback and is currently trading with only marginal gains around $1345 level.

The metal's retracement was accompanied by rise in the US longer-term (30-years) Treasury bond yields, clearly indicating jump in expectations of an eventual Fed rate-hike action. Hence, markets now keenly await for the release of FOMC meeting minutes on Wednesday, which if turns out to be on hawkish side would produce a knee-jerk reaction for greenback and weigh heavily on the yellow metal.