By Ashitha Shivaprasad
(Reuters) – Gold prices jumped 1% to a six-month high on Tuesday on technical trading, while investors looked forward to minutes from the U.S. Federal Reserve’s latest policy meeting for more cues on its rate-hike path.
Spot gold was up 1% to $1,841.99 per ounce as of 0612 GMT in thin trading.
U.S. gold futures rose 1.2% to $1,847.70 per ounce.
“We’re seeing a slight bid for gold and the $1,830 level appears to be a bit of a magnet. But with liquidity very low this time of the year, it appears to be technical buying as opposed to fundamentally driven,” said Matt Simpson, a senior market analyst at City Index.
Minutes from the Fed’s December policy meeting are due on Wednesday. The Fed raised rates by 50 basis points (bps) in December after four consecutive increases of 75 bps each.
“I doubt the minutes will pack as much of a punch as the Fed’s December meet had, but traders will look for confirmation of the lower terminal Fed rate expressed in the median dot plot and that could support gold,” Simpson added.
Gold is considered a hedge against inflation and economic uncertainties, but higher interest rates increase the opportunity cost of holding gold as it pays no interest.
Market participants also kept a close tab on surging coronavirus infections in top bullion consumer China.
Also on the radar, U.S. December payrolls data due on Friday, which is expected to show that the labour market remains tight.
On the technical front, spot gold may rise to a range of $1,861-$1,869 per ounce, according to Reuters technical analyst Wang Tao.
Elsewhere, spot silver rose 2% to $24.47 per ounce, platinum gained 1.4% to $1,084.28 and palladium was up 0.1% to $1,795.19.
(Reporting by Ashitha Shivaprasad in Bengaluru; editing by Uttaresh. V and Rashmi Aich)
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