Gold prices rose more than 1% on Wednesday, rebounding from a one-week low in the previous session as investors awaited the minutes of the U.S. Federal Reserve’s January meeting scheduled for later in the day.
Spot gold was up 1% at $4,927.19 an ounce by 1240 GMT. US gold futures for April delivery rose 0.9% to $4,947.70.
With prices below $4,900, “there’s some opportunistic buying in the market,” Natixis analyst Bernard Darda said, adding that investors are bracing ahead of the release of the Fed minutes in January.
Bullion prices fell to $4,841.74 an ounce on Tuesday, while many Asian markets were closed for Lunar New Year, as a strong U.S. dollar and easing tensions between the U.S. and Iran dampened demand for safe havens.
Investors are also awaiting Friday’s December U.S. consumer spending report for clues about the Fed’s monetary policy this year.
The market currently expects the first rate cut to occur in June, according to CME’s FedWatch tool.
Chicago Fed President Austan Goolsby suggested on Tuesday that the Fed could cut rates “several more times” this year if inflation resumes its decline to its 2% target, while Fed President Michael Barr said further rate cuts could occur at some point well into the future.
Non-yielding bullion tends to do well in low interest rate environments.
On the geopolitical front, Iran and the United States on Tuesday reached an agreement on “guidance” for nuclear talks. But that does not mean a deal is imminent, the Iranian foreign minister said.
“Unless there are geopolitical reasons, we don’t expect it to rise as much as last year, so we expect prices to average around $4,850 this year,” Darda said.
Spot silver rose 2.9% to $75.59 an ounce after falling more than 5% on Tuesday.
Spot platinum rose 1.9% to $2,045.13 an ounce and palladium rose 1.7% to $1,711.25.
(Reporting by Pablo Sinha in Bengaluru; Editing by Alexander Smith and Diti Pujara)
