Gold edges up as rate-hike fears ease; Fed rate decision in focus

Gold edged higher on Wednesday, extending gains for a fifth straight session, as optimism around the US-Iran peace deal eased concerns over ​interest rate hikes, while investors awaited further details on the deal ‌and the Federal Reserve’s policy meeting.

Fundamentals

Spot gold was up 0.4% at $4,348.93 per ounce, as of 0107 GMT. US gold futures for August delivery rose 0.3% to $4,368.40.

Details began to emerge of the US and Iran’s interim agreement to ​end the war in the Middle East, with US President ⁠Donald Trump saying it will rule out a nuclear weapon for Tehran ​and a US official saying it allows Iran to sell oil upon ​signing.

The memorandum of understanding signed this week, though yet to be made public, extends a tenuous ceasefire announced in April by another 60 days to allow the ​warring countries to negotiate a permanent truce.

Investors now await the Federal ​Reserve policy decision and remarks, the first under Chair Kevin Warsh, later in the day, ‌with ⁠rates widely expected to remain unchanged.

A majority of Fed policymakers now feel they will need to keep US short-term borrowing costs on hold all year, projections due out on Wednesday are expected to show, with a small ​number seen penciling ​in a rate ⁠hike to stop a spike in inflation from getting entrenched in the economy.

A record 45% of the ​reserve managers surveyed by the World Gold Council expect ​to increase their ⁠own institutions’ gold holdings over the next 12 months, the international organization said on Tuesday.

Spot silver rose 0.4% to $70.47 per ounce, platinum gained 0.9% ⁠to $1,819.45, and ​palladium was up 0.6% to $1,360.32.