Gold rises with anticipation of Fed minutes and inflation fears economy

Gold prices rose in trading today, Wednesday, recovering from their lowest levels in about a week, as investors awaited the release of the minutes of the last meeting of the US Federal Reserve, at a time when fears increased about the return of inflationary pressures due to recent geopolitical developments.

Gold rose in instant transactions by 0.45% to $4,123.28 per ounce by 07:00 GMT, after recording earlier in the session its lowest level since July 2.

On the other hand, US gold futures for August delivery fell by 0.4% to $4,138.80 per ounce.

The movements of the precious metal came in conjunction with the escalation of tensions in the region, following the United States’ implementation of a wave of strikes on Iran and its cancellation of a license that allowed Tehran to sell oil, in addition to the exposure of 3 tankers to attacks in the Strait of Hormuz.

In response to the American attacks, the Iranian Armed Forces threatened that any location that allows the United States to attack Iran will be a “legitimate target,” and a statement from the Khatam al-Anbiya headquarters stated, “Every support provided to the aggressive American army in order to violate the sovereignty of Iran’s Islamic lands will be a legitimate target for the Armed Forces.”

The Iranian Foreign Ministry said in a statement, “We repeat our warning to the countries of the region against allowing America to use its lands to launch strikes against Iran.”

“In the past 24 hours, we have again seen some concerns about inflation,” said Ilya Spivak, head of global macroeconomics at Tasty Life. “As a result, bond prices fell, the dollar rose slightly, and gold fell, and it now appears to be stabilizing after this correction.”

High oil

In financial markets, oil prices jumped more than 3% in early trading, US Treasury bond yields also rose, while the dollar maintained its highest levels during the week.

Markets are awaiting the release of the minutes of the Federal Open Market Committee meeting, which was held on June 16 and 17, in search of new indicators regarding monetary policy directions under the new Federal Reserve Chairman Kevin Warsh.

Data from the CME Group’s “Feed Watch” tool showed that the markets are now more than 63% likely to raise interest rates next September, compared to about 57% the previous day.

Gold is traditionally seen as a safe haven and a tool to hedge against inflation and geopolitical turmoil, but high interest rates reduce its appeal, given that it is an asset that does not generate a return.

Other precious metals:

• Spot silver rose by 1.3% to $60.77 per ounce.
• Platinum fell 0.2% to $1,636.72.
• Palladium fell 0.3% to $1,272.75 an ounce.