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 an ounce in the previous session, a more than a week low.
“Gold prices are taking support above $4,850 today… This is a technical bounce,” Kedia Commodities director Ajay Kedia told Reuters. Investors are looking to the Fed’s January minutes after rates fell in the previous session to ease geopolitical tensions, he added.
Markets are also focused on the US personal consumption expenditure 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 generally benefits from a low interest rate environment.
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Chicago Fed President Austin Goolsby said on Tuesday that the central bank could approve “significantly more” rate cuts this year if inflation falls back toward the 2% target.
However, Fed Governor Michael Barr said another rate cut could come well down the road, citing continued risks to the US inflation outlook.
“I expect the rallies to be limited and the bulls to support the sell-off, which should keep gold between $4,700-$5,100 in the near term,” said Matt Simpson, senior analyst at StoneX.
Oil prices rose on Wednesday, although gains were limited as investors balanced renewed tentative optimism in the US-Iran nuclear talks against a lack of breakthroughs 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) gained exactly the same 0.4% to $62.48.
Attention was focused on comments by US Vice President JD Vance, who said the second round of talks with Iran had been fruitful “in some ways”, but that Tehran was “still unwilling” to engage on some of the “red lines” set by President Donald Trump.
“Our primary concern here is that we don’t want Iran to get a nuclear weapon,” the vice president said in an interview with Fox News.
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The Iranian delegation was led by Foreign Minister Abbas Araghchi, while the US team was led by Special Envoy Steve Wittkoff.
