Gold prices rose on Wednesday, jumping from a week-long low recorded in the previous session, as the market awaited the minutes of the January meeting of the US Federal Reserve (Fed) to find more clues about the prospect of interest rate cuts.
Spot gold prices rose 1.1% to 4.929.69 USD/ounce in this afternoon's trading session, after falling more than 2% in Tuesday's session. US gold futures for April delivery rose 0.9% to 4,949.20 USD/ounce.
In general, the fluctuation range of gold throughout the year may be in the range of 4,700 to 5,100 USD/ounce," said Jigar Trivedi, senior research analyst at IndusInd Securities.
After the minutes of the FOMC January meeting were announced at the end of the day, investors will continue to monitor the US Personal Consumption Expenditures (PCE) report in December, expected to be released on Friday, to better assess the direction of interest rates this year.
According to CME's FedWatch tool, the market is currently expecting the Fed to begin cutting interest rates in June. Gold - a non-rotating asset - usually performs well in a low-interest environment.
Speaking on Tuesday, Chairman of the Chicago Fed Austan Goolsbee said that the Fed may approve "some more waves" of interest rate cuts this year if inflation returns to the downward trend towards the central bank's 2% target.
In the opposite direction, Fed Governor Michael Barr said that another rate cut may still be quite far away, due to the existing risks to the US inflation outlook.
In geopolitics, Iran and the US reached a consensus on "guiding principles" for negotiations related to Iran's nuclear program in a meeting on Tuesday. However, Iranian Foreign Minister Abbas Araqchi emphasized that it does not mean an agreement will be reached soon.
Also on Tuesday, the negotiators of Ukraine and Russia concluded the first day of two days of peace talks mediated by the US in Geneva, amid US President Donald Trump urging Kiev to act quickly to reach an agreement to end the four-year conflict.
On other precious metals markets, spot silver prices fell 2.2% to $75.05/ounce, after plunging more than 5% in the previous session. Platinum rose 2% to $2,049.42/ounce, while palladium rose 1.9% to $1,714.64/ounce.
