By: Economy Middle east

Gold prices edged slightly higher on Wednesday as traders exercised caution, evaluating the financial consequences of the Middle East tensions ahead of the U.S. Federal Reserve‘s rate determination. Spot gold gained 0.15 percent to $5,010.03 per ounce by 10:31 UAE time, while U.S. gold futures for April delivery increased 0.13 percent to $5,014.24.

Within the UAE, gold rates showed slight upward movement. The valuation of 24K and 22K gold rose AED1.00 to AED601.00 and AED556.50 respectively. Similarly, 21K and 18K gold advanced AED0.75 to AED533.50 and AED457.25 respectively, while 14K gold grew AED0.50 to AED356.75.

The Federal Reserve is broadly expected to keep interest rates unchanged for a second straight meeting when it discloses its decision later today. Concurrently, oil prices remained north of $100 a barrel, as Iranian strikes on the United Arab Emirates heightened concerns regarding the global supply environment.

The Strait of Hormuz, a channel for 20 percent of international crude freight, remains mostly closed, with Iran threatening vessels connected to the U.S. and Israel. This suspension has maintained elevated crude costs, compounding inflationary strains by driving up transport and industrial overheads.

While the inflationary climate benefits gold as a store of value, high interest rates limit its appeal by increasing returns on yield-generating assets. Meanwhile, central banks in the U.K., the Eurozone, Japan, Canada, Switzerland, and Sweden are set to convene this week for their initial policy meetings since the conflict began.

Spot silver climbed 0.25 percent to $79.95 per ounce. Conversely, spot platinum fell 0.61 percent to $2,115.00, and palladium dropped 0.88 percent to $1,574.00.