Investing.com-- Gold prices rose in Asian trade on Wednesday, extending a recent rebound as the dollar retreated in anticipation of more cues on U.S. interest rates, most notably from the minutes of the Federal Reserve’s late-January meeting.
Still, the yellow metal remained largely within a $2,000 to $2,050 an ounce trading range established over the past month, as the outlook for gold was clouded by the prospect of higher-for-longer U.S. interest rates.
Spot gold rose 0.3% to $2,029.89 an ounce, while gold futures expiring in April rose 0.1% to $2,040.75 an ounce by 00:21 ET (05:21 GMT).
Focus was now squarely on the minutes of the Fed’s late-January meeting for more cues on the possible trajectory of U.S. interest rates.
The central bank had kept rates steady during the meeting, but had largely downplayed expectations of early interest rate cuts.
Since then, a string of hotter-than-expected U.S. inflation readings saw markets further price out the prospect of early rate cuts, which in turn weighed heavily on gold prices.
The yellow metal had briefly broken below the $2,000 an ounce level earlier in February, but saw a strong rebound from two-month lows.
Beyond Wednesday’s Fed minutes, focus is also on addresses from a string of Fed officials this week, including Raphael Bostic and Michelle Bowman, both of whom are part of the bank’s rate-setting committee.
Higher U.S. rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal. But given that U.S. rates are still expected to eventually fall in 2024, gold and other metal prices are likely to see strong gains, Goldman Sachs analysts said in a note this week.
Other precious metal prices also rose on Wednesday.
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