By Amrith Ramkumar and David Hodari 

Gold prices inched lower Thursday, with investors still digesting minutes from the Federal Reserve's January meeting.

Gold for April delivery fell less than 0.1% to $1,331.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices have fallen from their highest level recently with the dollar rebounding from multiyear lows and bond yields rising.

A stronger dollar makes gold and other dollar-denominated commodities more expensive for overseas buyers. Some analysts have also said the recent surge in bond yields reflects investors' bets that higher inflation will give the Federal Reserve a freer hand to raise interest rates more aggressively moving forward.

Minutes released Wednesday showed that several Fed officials late last month believed the economy was set to grow even faster than when they elevated their growth projections at their December meeting.

Some officials also appeared more certain inflation would return to their 2% target over the coming year after years of consistently lagging behind.

The combination of gradually higher inflation and higher rates could pose trouble for gold, which struggles to compete with yield-bearing assets like Treasurys when rates rise but is also used by many investors to hedge against an unexpected rise in inflation.

"If we get 2% inflation, I don't think that's going to be enough to cause the gold market to rally," said Jim Wyckoff, senior analyst at Kitco Metals. "I think it's going to take some kind of hotter inflation report that comes up that maybe suggests 3 or 4%."

The minutes showed some Fed officials were still concerned that inflation will continue to lag behind their target, a trend that could lead them to stay accommodative with monetary policy, according to some analysts.

The dollar falling helped gold bounce off its lows for the day, with the WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, down 0.4%. Some investors think the dollar will plumb fresh multiyear lows moving forward, boosting commodity prices.

Among base metals, copper for March delivery added 0.2% to $3.2235 a pound. The industrial metal is slightly off its roughly four-year highs from late December, but some analysts think favorable demand from China, the world's largest consumer, will continue to support prices.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

February 22, 2018 10:59 ET (15:59 GMT)

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