Spot gold was 0.7 per cent higher at $1,991.69 per ounce
Gold prices rose on Tuesday, on a weaker U.S. dollar and Treasury yields as investors look forward to minutes from the Fed’s latest meeting for more guidance on its interest rate outlook.
Spot gold was 0.7 per cent higher at $1,991.69 per ounce, as of 0437 GMT. U.S. gold futures added 0.6 per cent to $1,993.50.
The dollar and the U.S. bond yields continue to drop. Demand from central banks is also quite strong. All these are bullish for gold. The market is reconsidering that drop we saw yesterday, said Edward Meir, a metals analyst who provides research for Marex.
The dollar dropped to more than a 2-1/2-month low as investors expect U.S. interest rates to drop next year.
Benchmark U.S. 10-year Treasury yields stayed near two-month lows hit last week.
Minutes from the Federal Reserve’s latest meeting are due at 1900 GMT. Signs of slowing inflation in the US have boosted expectations that the U.S. central bank was done hiking interest rates.
Markets are broadly expecting the Federal Reserve to leave rates unchanged in the December meeting and currently pricing in a greater than 50 per cent possibility of a rate cut of at least 25 bps by May, as per CME’s FedWatch Tool.
I think the minutes will be a non-event. There was not going to be any mention of cuts, Jerome Powell made that very clear in his news conference. It is just the market that is expecting cuts from the Fed, Meir added.
Spot silver gained 1.6 per cent to $23.74 per ounce, platinum added 0.4 per cent to $922.10, while palladium eased 0.3 per cent to $1,074.44.
