Gold prices firmed on Wednesday, as investors awaited minutes of the Federal Reserve’s last policy meeting for further cues on the central bank’s interest rate cut path.
Spot gold rose 0.4% at $2,338.88 per ounce by 0656 GMT. U.S. gold futures gained 0.6% to $2,346.80.
The dollar remained on the back foot after dovish comments from Fed Chair Jerome Powell. A weaker dollar makes bullion more attractive for other currency holders.
Ahead of the Fed minutes’ release at 1800 GMT, Powell said on Tuesday the U.S. was back on a “disinflationary path”, but policymakers needed more data before cutting rates.
The gold market has been holding a narrow range for a few weeks now, said Marex analyst Edward Meir, adding that bullion prices might move higher later this year with all these elections up in the air.
Next on investors’ radar are the ADP employment and weekly jobless claims data due later in the day, and the nonfarm payrolls report due on Friday.
“The NFP release this week could shake things up (for the gold market) if we see a shift in rate-cut expectations,” said Tim Waterer, KCM Trade’s chief market analyst.
Traders see a 65% chance of a Fed rate cut in September, according to CME FedWatch Tool.
Lower rates reduce the opportunity cost of holding non-yielding bullion.
“There’s a clear path for gold to outperform from here, likely fuelled by Western flows. Conversely, in the event that central bank demand drops drastically, rates remain high for longer and Asian investor sentiment flips, we could see a pullback in the second half,” the World Gold Council said in its mid-year outlook report.
Spot silver rose 1.2% to $29.88 per ounce, a more than one-week high.
Platinum climbed 0.8% to $999.35 and palladium was flat at $1,021.