Gold prices rise from near one-week low as investors focus on Fed meeting minutes, with gains capped by fresh US-Iran tensions.
GOLD prices edged higher from a near one-week low on Wednesday, as investors looked ahead to minutes of the Federal Reserve’s June meeting with renewed inflation concerns from fresh U.S.-Iran strikes capping gains in the precious metal.
Iran’s Revolutionary Guards said they targeted U.S. military sites in Bahrain and Kuwait on Wednesday after the U.S. launched a wave of strikes on Iran and revoked a licence allowing the country to sell oil after three tankers were hit by projectiles in the Strait of Hormuz.
Spot gold rose 0.6% to $4,128.28 per ounce by 0544 GMT, after dropping to its lowest since July 2 earlier in the day. U.S. gold futures for August delivery shed 0.4% to $4,138.80.
“Over the past 24 hours, there was a little bit of a scare again on the inflation front. So bonds came in lower, the dollar popped a little, gold pulled back, and now seems to be kind of stabilising after that correction,” said Ilya Spivak, head of global macro at Tastylive.
“At this point, we’ve been watching gold attempt to carve out a bottom.”
Oil prices jumped more than 3%, U.S. Treasury yields advanced, while the dollar edged to its highest levels in a week.
Markets have increased their bets for a September Federal Reserve rate hike to an over 63% chance, up from about 57% on Tuesday, the CME FedWatch tool showed.
Minutes from the Federal Open Market Committee’s June 16 to 17 meeting, due later today, are awaited for clues on the interest rate path under Fed Chair Kevin Warsh.
“These FOMC minutes should be really interesting. They came off hawkish, but we’ll see if the conversation was about an oil shock or a business cycle risk that’s already manifesting,” Spivak said.
While gold is seen as an inflation hedge and usually gains in times of geopolitical uncertainty, high interest rates tend to weigh on the non-yielding asset.
Among other metals, spot silver rose 1.3% to $60.77 per ounce, platinum slipped 0.2% to $1,636.72 and palladium dropped 0.3% to $1,272.75.
