By: Economy Middle East

Gold prices advanced on Wednesday as easing U.S. Treasury yields supported the precious metal, while investors awaited minutes from the Federal Reserve’s July meeting for indications on the central bank’s future policy direction.

As of 5:32 GMT, spot gold gained 0.13 percent to $4,340.20 an ounce, recovering after a nearly 2 percent drop in the previous session. Meanwhile, U.S. gold futures edged 0.62 percent lower to $4,393.37.

In the UAE, gold rates edged lower, with 24-carat gold losing AED1.75 to AED524.25 and 22-carat gold easing AED1.5 to AED485.5.

In addition, 21-carat gold eased AED1.5 to AED465.5 and 18-carat gold declined AED1.25 to AED399.

Meanwhile, 14-carat gold declined AED1 to AED311.25.

Fed rate hike expectations ease

Gold prices rose as U.S. Treasury yields retreated from earlier highs on Tuesday, reversing course amid a global bond selloff that pushed long-term borrowing costs in several major economies closer to multi-decade highs. Weaker expectations for Federal Reserve rate hikes and growing concerns over fiscal deficits continue to support gold prices.

The minutes of the Federal Open Market Committee’s July meeting are due at 18:00 GMT, with investors looking for further signals on the Fed’s monetary policy path.

According to the CME FedWatch Tool, markets are currently pricing in a 64 percent probability that the Fed will keep rates unchanged next month, compared with a 36 percent chance of a rate hike.

Expectations for a hike have weakened following a run of softer-than-expected U.S. economic data. Lower interest rates tend to support gold prices by reducing the opportunity cost of holding the non-yielding asset.

Mideast tensions persist

On the geopolitical front, U.S. President Donald Trump said Tuesday that Washington was not holding talks with Iran and maintained that the Strait of Hormuz remained open, contradicting Tehran’s claim that the key shipping route was still closed.

Oil prices rose for a fourth consecutive session amid continued uncertainty over shipments through the strait.

Other precious metals

As gold prices rose, the precious metals market saw mixed movement. Spot silver fell 0.4 percent to $63.03 an ounce, while platinum advanced 0.5 percent to $1,720.10. Palladium was little changed at $1,289.45 an ounce.