Singapore, Jan. 4 (BNA): Gold prices rose on Wednesday, supported by a weaker dollar, although caution prevailed as investors waited minutes for the Federal Reserve’s December monetary policy meeting that could offer hints about the US central bank’s tightening path.
Spot gold rose 0.3 percent to $1,845.56 an ounce as of 558 GMT. US gold futures rose 0.3% to $1,851.30, Reuters reported.
The dollar index fell 0.2 percent after hitting a two-week high on Tuesday.
A weak dollar makes bullion cheaper for holders of other currencies.
“Traders remain cautious ahead of the Fed’s minutes. The minutes are likely to give an idea of the Fed’s policy decisions and this will affect the dollar and gold,” said Harish V, Head of Commodities Research at Geojit Financial Services.
“Ongoing recession fears and geopolitical tensions are likely to raise gold’s safe-haven appeal in 2023.
There are chances of more inflows into gold when the Fed starts easing policies.”
Minutes of the Federal Reserve’s monetary policy meeting are scheduled for December 13-14 at 1900 GMT. The US central bank raised interest rates by 50 basis points in December after four consecutive hikes of 75 basis points each.
Bullion is seen as a hedge against inflation, but rising interest rates weaken the attractiveness of non-yielding assets.
Michael Langford, director of corporate advisory firm AirGuide, said the short-term outlook is that gold will rally to $1,880 an ounce and trade broadly around $1,800 for most of the year.
Elsewhere, spot silver rose 0.3%, to $24.06.
Both metals are mainly used in automobile exhaust systems. Platinum settled at $1,083.65 while palladium rose 1.5% to $1,736.06.
MI