Gold prices remained below the $5,000 threshold on Wednesday as investors awaited the release of minutes from the Federal Reserve’s January meeting for further guidance on the outlook for US interest rates.
Gold futures (GC=F) rose 0.9% to $4,949.60 a troy ounce, while spot prices were muted at $4,930.63 at the time of writing, after hitting $4,862 per ounce in the previous session, its lowest level in more than a week.
“Gold prices are taking support above $4,850 today… this is a technical bounce” after prices fell in the previous session on easing geopolitical tensions”, Ajay Kedia, director at Kedia Commodities told Reuters. Investors are looking out for Fed’s January minutes, he added.
Markets are also focused on the US personal consumption expenditures report for December, due on Friday, which is expected to provide further clues on the direction of rates this year. Markets currently expect the Fed to cut rates in June. Non-yielding bullion typically benefits from lower interest rate environments.
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Chicago Fed president Austan Goolsbee said on Tuesday that the central bank could approve “several more” rate cuts this year if inflation resumes its decline towards the 2% target.
However, Fed governor Michael Barr said another rate cut could come somewhere well down the road, citing ongoing risks to the US inflation outlook.
“I expect rallies to remain capped and bulls to support sell-offs, which should keep gold ranging between $4,700-$5,100 over the near term,” said Matt Simpson, a senior analyst at StoneX.
Oil prices edged higher on Wednesday, although gains were capped as investors balanced tentative optimism over renewed US-Iran nuclear talks against the absence of a breakthrough that could ease concerns over supply risks.
Brent crude (BZ=F) futures rose 0.4% to $67.66 a barrel, while West Texas Intermediate (CL=F) advanced by the exact same 0.4% to $62.48 at the time of writing.
Attention focused on comments from US vice president JD Vance, who said a second round of negotiations with Iran had been productive “in some ways”, but that Tehran was “not yet willing” to engage on certain “red lines” set by president Donald Trump.
“Our primary interest here is we don’t want Iran to get a nuclear weapon,” the vice president said during an interview with Fox News.
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The Iranian delegation was led by foreign minister Abbas Araghchi, while the US team was headed by special envoy Steve Witkoff.