BENGALURU: Gold prices hit a near two-week peak on Wednesday, supported by a dip in US Treasury yields after dovish remarks from Federal Reserve officials, while minutes from the US central bank’s last policy meeting will be eyed for more cues on rates.
Spot gold was up 0.6% at $1,871.52 per ounce by 1130 a.m. ET (1530 GMT), its highest level since Sept. 29. US gold futures rose 0.5% to $1,885.20.
Dovish comments from Fed officials that the US central bank may pause tightening and turmoil in the Middle East are supporting the gold market, said Jim Wyckoff, senior analyst at Kitco Metals.
Atlanta Fed President Raphael Bostic said on Tuesday he saw no more US rate hikes, while Minneapolis Fed President Neel Kashkari said “possible” higher bond yields meant the Fed could do less.
Benchmark 10-year US Treasury yields fell for the second straight session to a near two-week low, moving further away from their 2007 highs scaled last week.
Traders are now pricing in around a 71% chance that the Fed will leave interest rates unchanged in the current 5.25%-5.50% range this year, according to CME FedWatch tool.
The Fed’s latest policy minutes are due at 1800 GMT. Also on the radar, US Consumer Price Index data on Thursday is expected to provide more clarity on the US interest rate path.
A tamer inflation report will be bullish for the gold market and could push prices to $1,900, Wyckoff said. Gold is highly sensitive to rising US interest rates as these increase the opportunity cost of holding bullion. Investors also kept a tab on the developments in the conflict between Israel and Palestinian group Hamas.
On Monday, prices climbed 1.6% as these geopolitical tensions lifted safe-haven demand. Spot silver rose 1% to $22.02 per ounce. Platinum gained 0.4% to $883.78, while palladium dropped 0.6% to $1,163.19.
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