By Anushree Ashish Mukherjee
(Reuters) – Gold prices rose on Wednesday as elevated tensions in the Middle East fuelled a rush into safe-haven, while the market focus shifted to the minutes from the U.S. Federal Reserve’s latest policy meeting for cues on interest rate cut timeline.
Spot gold was up 0.3% at $2,029.29 per ounce as of 9:39 a.m. ET (1439 GMT). Prices climbed to their highest since Feb. 9 earlier in the session.
U.S. gold futures were steady at $2,038.7 per ounce.
“The minutes will probably lean just slightly hawkish on monetary policy”, the tenor of the marketplace is now that the rate cut probably will not come until June, thus in the near term, gold and silver prices may face downward pressure, said Jim Wyckoff, senior analyst at Kitco Metal.
There is still some tensions due to the Israel-Hamas war, which is keeping a floor under the gold market, he added.
The Iran-aligned Houthis persisted in their attacks on shipping lanes in the Red Sea and Bab al-Mandab Strait, with at least four more vessels hit by drone and missile strikes since Friday.
Bullion is considered a hedge against economic and geopolitical uncertainties, while higher interest rates reduce the appeal of holding non-yielding gold.
The minutes of the Fed’s January policy meeting is due at 1900 GMT.
The Fed will likely lower the federal funds rate in June, according to a narrow majority of economists polled by Reuters.
“We maintain a patient bullish outlook for gold but expect the next push to a fresh record high may not occur until the FOMC finally start cutting rates,” said Ole Hansen, Saxo Bank’s head of commodity strategy.
The benchmark 10-year Treasury yield was down for the day, making bullion more appealing. [US/] [USD/]
Spot platinum lost 1.5% at $887.02 per ounce, palladium fell 1.8% to $956.93 and silver gained 0.2% to $23.04 per ounce.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Shilpi Majumdar)
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