By Anjana Anil
(Reuters) – Gold prices rose on Wednesday as investors looked to the minutes of the Federal Reserve’s latest policy meeting for cues on timing of interest rate cuts, while safe-haven demand buoyed by escalating conflict in the Middle East also lent support.
Spot gold was up 0.2% at $2,027.96 per ounce as of 1012 GMT. Prices had climbed to their highest since Feb. 9 earlier in the session.
Meanwhile, U.S. gold futures were steady at $2,039.30 per ounce.
“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.
Continued geopolitical worries are also adding some support, Hansen said, highlighting that the market focus today will be on FOMC minutes.
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.
The minutes of the Federal Reserve’s January policy meeting, due at 1900 GMT, could help gauge the timing of the widely-expected interest rate cuts.
“If the meetings strike a dovish tone, this could allow gold to shine. Alternatively, should the minutes sound more hawkish – gold may be exposed to downside losses,” said FXTM senior research analyst Lukman Otunuga.
The Fed will likely lower the federal funds rate in June, according to a narrow majority of economists polled by Reuters.
The dollar index firmed 0.1%, turning greenback-priced bullion slightly more expensive to overseas buyers. [USD/]
Higher interest rates and a stronger dollar reduce the appeal of holding gold.
Spot platinum lost 0.3% at $898.61 per ounce, palladium fell 0.8% to $966.95 and silver gained 0.3% to $23.06 per ounce.
(Reporting by Anjana Anil in Bengaluru; Editing by Varun H K)
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