Updated from 10:12 a.m. with price changes after Federal Reserve minutes
NEW YORK (TheStreet) -- Gold prices added to early morning losses on Wednesday as minutes from the Federal Reserve's last policy-making meeting revealed that central bank members are considering a change to the benchmark interest rate as unemployment falls.
Gold for April delivery at the COMEX division of the New York Mercantile Exchange was sliding $8.10 to $1,316.30 an ounce. The gold price traded as high as $1,323 and as low as $1,314 an ounce, while the spot price was losing about $5.
Minutes from the January Federal Open Market Meeting said participates raised the possibility that it may be appropriate to increase the federal funds rate "relatively" soon.
"Higher interest rates are anathema to gold, because it's a competing asset and anti-inflationary," George Gero, precious metals strategist at RBC Capital Markets, said in a phone interview from New York. "People would be interested in investing money into interest-bearing assets rather than in gold."
The Fed, at its January meeting, reduced the pace of the monetary stimulus program by $10 billion, shrinking the monthly purchases to $65 billion.
Fed Chairwoman Janet Yellen on Feb. 11 told the House Financial Services Committee that she didn't expect the central bank to slow its so-called taper unless economic outlook changed noticeably. The Fed minutes indicated a similar opinion.
Gold prices since the financial crisis have been influenced by Fed policy because many investors view central bank stimulus as an inflationary policy. The pullback in monthly purchases, though, hasn't resulted in a lower-trending gold price. Instead, the roughly 10% rise in 2014, according to precious metals analysts and strategists, comes amid a safe-haven rotation into the asset as equity markets turn volatile and as easing from foreign banks, such as the European Central Bank, Bank of Japan and Bank of England, among others, maintain their own stimulus programs.
Wednesday's Fed minutes won't change the upwardly trending pace of gold and Wednesday's selling suggested investors are taking money off the table or sitting on the sidelines "until the smoke clears," Gero said.