Gold prices fell in European trade for a second session, almost hitting six-week lows as dollar powered up against major rivals. 

Dollar is boosted by strong demand following bullish remarks by Fed officials, which bolstered the case for a Fed rate hike in June. 

Gold Prices Today

Gold prices fell 0.2% to $1,954 an ounce, with a session-high at $1,962 an ounce, after losing 0.9% yesterday, resuming losses after a short rebound from six-week lows at $1,952. 

Dollar

The dollar index rose 0.3% on Thursday on track for the third straight session, hitting two-month highs at 104.16 against a basket of major rivals. 

Dollar's gains come on the back of strong alternative investment demand, making dollar-denominated gold futures less appealing to holders of other currencies. 

Fed Remarks

Fed member Christopher Waller said the decision on whether the Fed will raise interest rates in June will depend on upcoming data, adding he doesn't support a pause to policy tightening until there's clear proof that inflation is heading to 2%. 

Fed Minutes

The Federal Reserve's May minutes showed the policymakers are leaning towards a pause in interest rate hikes in June amid uncertainty about US economic outlook. 

US Rates

The markets are currently pricing in a 31% chance of a 0.25% Fed rate hike in June, with a 69% chance of no change. 

Economic Data

Now investors await important data later today on US GDP for the first quarter of the year, and unemployment claims. 

Obviously strong data will boost the case for a Fed rate hike in June and underpin the greenback, in turn hurting gold prices. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 941.29 tones. 

The Federal Reserve's meeting minutes showed division between officials on the need for further increases to interest rates, with some members expressing the need to, and others calling for a tapering off.

The Federal Reserve decided earlier this month to raise interest rates by 25 basis points, but the minutes shed light on the divisions about the next stop, with the overall tone pointing to a pause in policy tightening. 

At the last meeting, Federal Open Market Committee officials decided to remove a major passage off the manifest, which pointed to the need to maintain current monetary policies. 

The Fed is now depending more on fresh data to decide the next move. 

Overall, members expressed uncertainty on whether upcoming policy tightening is useful, with the discussions ending with two potential scenarios: 

The first was the view of some members that inflation reduction has been unacceptably slow, and thus there's a need for more rate hikes. 

The second was the view of some members who pointed to a slowdown in growth, which necessitates a pause to policy tightening. 

The Energy Information Administration reported a steeo drop of 12.5 million barrels in US crude stocks last week, while analysts expected an increase of 1.9 million barrels.

Gasoline stocks are now down 2.1 million barrels to 216.3 million barrels, while distillate stocks are down 600 thousand barrels to 105.7 million barrels.

US stock indices declined on Wednesday amid the ongoing debt ceiling crisis with little progress in negotiations, while investors await the Federal Reserve's meeting minutes.

Debt Ceiling

White House and Congressional officials will meet later today to further negotiate after the failure of the previous talks to reach a compromise on raising the debt ceiling. 

US President Joe Biden will extend talks with Congressional leaders later this week in a race to a catastrophic default on debt next week. 

Many sticking points remain between both sides, with US Treasury Secretary Janet Yellen reiterating warnings from a potential default on payments next June, which would threaten the credit rating for the US and tip the economy into recession. 

Fed Meeting

Investors additionally await the Federal Reserve's meeting minutes later today to better gauge the path forward for monetary policy in the US.

On trading, Dow Jones fell 0.6%, or 200 points as of 15:47 GMT to 32,856, while S&P 500 fell 0.7%, or 30 points to 4,112, as NASDAQ lost 1%, or 121 points to 12,437.