- Federal Reserve minutes due at 1900 GMT
- Dollar slides off two-week high
Jan 4 (Reuters) – Gold prices edged higher on Wednesday, helped by a pullback in the dollar, although caution reigned as investors awaited minutes of the US Federal Reserve’s December meeting, which offer clues to the US Federal Reserve’s tightening path. central bank could give.
Spot gold was up 0.3% to $1,845.56 an ounce (558 GMT). US gold futures were up 0.3% to $1,851.30.
The dollar index slipped 0.2% after hitting a two-week high on Tuesday. A weaker dollar makes bullion cheaper for other currency holders.
“Traders remain cautious ahead of Fed minutes. The minutes will likely give an idea of the Fed’s policy decisions and this will affect the dollar and gold,” said Hareesh V., head of commodity research at Geojit Financial Services.
“Ongoing recession concerns and geopolitical tensions should increase gold’s safe haven appeal in 2023. There are chances of further inflows into gold as the Fed begins to ease policy.”
Minutes of the Fed’s December 13-14 monetary policy meeting are due at 1900 GMT. The US Federal Reserve hiked interest rates by 50 basis points (bps) in December after four consecutive hikes of 75 bps each.
Bullion is viewed as a hedge against inflation, but rising interest rates dull the appeal of non-yielding assets.
The near-term expectation is for gold to rise to $1,880 an ounce and trade broadly around $1,800 for most of the year, said Michael Langford, director of management consulting firm AirGuide.
Elsewhere, spot silver was up 0.3% to $24.06.
Traders also kept tabs on rising coronavirus infections in top gold consumer China after the country made an abrupt reversal in COVID policy in early December.
If economic conditions improve in China over the next six months, it will be positive for vehicle purchases and precious metals like platinum and palladium, Langford said.
Both metals are primarily used in vehicle exhaust systems. Platinum was flat at $1,083.65 while palladium was up 1.5% to $1,736.06.
Reporting by Ashitha Shivaprasad in Bengaluru; Edited by Sherry Jacob-Phillips and Rashmi Aich
Our standards: The Thomson Reuters Trust Principles.
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