Gold eases as investors await Fed minutes

BENGALURU, Aug 21 (Reuters): Gold eased on Wednesday to hold around the $1,500 level as investors cashed in some gains ahead of minutes from the US Federal Reserve's last meeting, which are expected to shed more light on interest rate cuts.

Spot gold was down 0.5 per cent at $1,499.51 per ounce as of 1232 GMT, while US gold futures slipped 0.4 per cent to $1,509.60.

The metal is still up more than $80 this month after recent strong gains fuelled by worries over the outlook for the global economy, and the prospect of more US interest rate cuts.

"The market is nervous while it waits for further cues on the outcome of the Fed meeting minutes," said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.

However, "fundamentals for gold remain positive as central bankers have increased their gold reserves amid geopolitical tension, trade spats and signals of stimulus," he added.

Minutes from the Federal Open Market Committee's most recent meeting in July - when the US central bank cut interest rates for the first time in a decade - are due on Wednesday.

Traders are also awaiting the central bank's annual Jackson Hole seminar later this week, with major focus on a scheduled speech by Fed Chair Jerome Powell.

Powell's comments are of particular interest after last week's inversion of the US yield curve - widely regarded as a recession signal - boosted expectations the Fed would lower interest rates at its September policy meeting.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.