BENGALURU Gold prices inched down but hovered above the key US$2,400 level on Wednesday, as investors awaited minutes from the Federal Reserve's latest policy meeting for fresh signals on the timing of US interest rate cuts.

Spot gold was 0.3% lower at US$2,415.33 per ounce as of 0733 GMT. Bullion hit a record high of US$2,449.89 on Monday.

US gold futures were down 0.3% at US$2,419.00.

One of the "factors supporting gold is fiat currency debasement undertaken by the US and the developed nations due to the rising budget deficits," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.

"There's a potential that stimulus fiscal policy will play a higher role in stimulating these countries, and if this takes shape, the confidence of the individual country currency will be eroded."

Minutes of the Fed's May policy meeting is due at 1800 GMT. Traders are currently pricing a 60% chance of a rate cut by September.

Recent data suggested US inflation resumed its downward trend, but Fed policymakers said on Tuesday that the central bank should wait several more months to ensure inflation really is back on track to its 2% target before cutting interest rates.

Lower interest rates and geopolitical uncertainty make bullion a favourable investment.

Gold has been solidifying above the US$2,400 level ahead of a potentially looser interest rate environment later in the year, but for it to hit record highs, a pullback in the dollar or bond yields, or an increase in safe-haven demand may be required, said Tim Waterer, chief market analyst at KCM Trade.

Spot silver fell 0.8% to US$31.71 after hitting an over 11-year high on Monday.

"Silver price is more momentum driven and the break out of major resistance level is more of a catch up play, given resilient gold prices," OANDA's Wong said.

Platinum edged 0.1% lower to US$1,045.35 and palladium dropped 1% to US$1,017.00.

  - Reuters