Gold prices rise

Gold prices rose in low market liquidity on Wednesday, rebounding from a one-week low hit in the previous session, while markets await the release of the Federal Reserve’s January meeting minutes for cues into the rate outlook.

Spot gold rose 1.2 percent to $4,934.74 per ounce by 0741 GMT, after declining more than 2 percent on Tuesday. US gold futures for April delivery gained 1 percent to $4,954.

“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, said Ajay Kedia, director at Mumbai-based Kedia Commodities.

Investors are looking out for Fed’s January minutes, he added.

Investors will also parse the US Personal Consumption Expenditures report for December, due on Friday, for further indications on where rates might head this year.

Markets currently expect the Fed to cut rates in June, per CME’s FedWatch Tool.

Non-yielding bullion tends to do well in low-interest-rate environments.

The Fed could approve “several more” rate cuts this year if inflation resumes a decline to the 2 percent target, Chicago Fed President Austan Goolsbee said on Tuesday.

On the other hand, Fed Governor Michael Barr said that another rate cut could come somewhere well down the road considering ongoing risks to the US inflation outlook.

In geopolitics, Iran and the US reached an understanding on Tuesday on “guiding principles” for nuclear talks, but that does not mean a deal is imminent, the Iranian Foreign Minister said.

Meanwhile, President Donald Trump is pressing Kyiv to act fast to reach a deal as Ukraine and Russia hold US-mediated peace talks in Geneva.

“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.