• Gold declined as Fed Minutes revealed a “substantial majority” backed a 50 bps cut, while some preferred 25 bps.
• CME FedWatch Tool shows lower odds of a 25 bps cut, down to 75.9%, with rising expectations for a rate pause.
• US 10-year Treasury yield rises to 4.062%, supporting the US Dollar.
• Traders await Thursday's CPI data for further direction on inflation and Fed policy.

Gold extended its losses for the sixth consecutive day after the Federal Reserve (Fed) revealed its September Meeting Minutes. The Minutes showed that the “substantial majority” of the Federal Open Market Committee (FOMC) backed a 50-basis-point (bps) cut. Despite this, the XAU/USD trades within familiar levels near $2,610, down over 0.37%.

The FOMC’s Minutes showed that some officials would’ve preferred a 25 bps cut, though all participants favored lowering interest rates. Regarding the Fed’s dual mandate in both cases, almost all officials saw inflation risks tilted to the downside, while risks to the labor market were on the upside.

Following the data, the CME FedWatch Tool shows odds for a 25 bps interest rate cut were lowered from 85.2% a day ago to 75.9%. This means that some market participants positioned themselves toward the Fed holding rates unchanged, with odds at 24.1%, up from 14.8% on Tuesday.

US Treasury yields continued to rise with the US 10-year Treasury note at 4.062%, up five and a half bps. This underpinned the Greenback, which according to the US Dollar Index (DXY) is up 0.42% at 102.90, its highest level since mid-August 2024.

Now, traders' focus shifts to Thursday's release of the US Consumer Price Index (CPI). Estimates suggest that inflation will continue to aim lower. Nevertheless, if inflation comes in higher than estimates, it will open the door for a pause on the Fed’s easing cycle.