By: Creamer media

Gold prices saw an upward trend on Wednesday, recovering from a one-week low reached during the previous trading session. This rebound occurred as financial markets waited for the publication of the Federal Reserve‘s January meeting minutes, seeking clues regarding the potential timeline for future interest rate reductions.

Spot gold saw a rise of 0.91 percent, reaching $4,932.15 per ounce, which followed a significant drop of more than 2 percent on Tuesday. Similarly, U.S. gold futures designated for April delivery climbed by 0.89 percent to settle at $4,949.56.

The recovery in gold prices was mirrored in the UAE retail market on Wednesday, where 24k gold rose by AED3.75 to settle at AED594.50, while 22k and 21k both climbed AED3.50 to reach AED550.50 and AED528.00, respectively. Lower carats followed suit, with 18k gaining AED2.75 to trade at AED452.50 and 14k increasing by AED2.25 to end at AED353.00.

In India, prices showed similar resilience with a 1.03 percent increase over the previous close, as 24-carat gold reached INR15,434 per gram in Delhi amid fluctuating international sentiment. 

Other precious metals also saw gains; spot silver increased by 2.43 percent to $75.59 per ounce after a sharp 5 percent decline in the prior session, while platinum rose 2.05 percent to $2,045.00 and palladium grew by 2.40 percent to $1,705.00.

Economic indicators and Fed policy

Following the release of the FOMC minutes later today, market participants intend to examine the U.S. Personal Consumption Expenditures report for December, which is scheduled for Friday. This data is expected to provide further signals regarding the direction of interest rates throughout the current year. According to the CME’s FedWatch Tool, current market expectations point toward a June rate cut by the Federal Reserve. Historically, bullion—which does not provide a yield—tends to perform well in environments characterized by low interest rates. On Tuesday, Chicago Fed President Austan Goolsbee noted that the central bank might authorize “several more” rate cuts this year if inflation continues its path toward the 2 percent target. In contrast, Fed Governor Michael Barr suggested that a rate reduction might not occur for some time, citing persistent risks to the inflationary outlook.

Geopolitical developments

In the realm of international relations, the United States and Iran reached a mutual understanding on Tuesday regarding the “guiding principles” for negotiations concerning Iran’s nuclear program. However, Iranian Foreign Minister Abbas Araqchi clarified that this progress “does not mean a deal is imminent,” indicating that work remains. Simultaneously, representatives from Russia and Ukraine finished the first of two days of peace negotiations in Geneva. These talks, which are being mediated by the United States, involve significant pressure from President Donald Trump, who urged the government in Kyiv to move quickly to secure an agreement and bring an end to the conflict that has now lasted for four years.

Geopolitical relief that pressured gold earlier in the week has been partially tempered by the tense nature of the second day of trilateral talks in Geneva, where Ukrainian President Volodymyr Zelenskyy criticized what he described as “unfair pressure” from the U.S. to make territorial concessions in the Donbas region. 

Meanwhile, the U.S. Dollar Index (DXY) eased slightly to 104.10, providing some breathing room for precious metals, though gains are capped as the market anticipates the 2:00 PM ET release of the FOMC minutes which may reinforce a “higher for longer” stance. 

Analysts also noted that physical demand in China and Hong Kong remains muted as many major Asian hubs continue to observe the final days of the Lunar New Year holiday break.