Gold prices increased during Asian trading hours on Wednesday, buoyed by a weakening dollar and heightened by safe haven demand following geopolitical developments.
The price of spot gold rose by 0.3% to $2,419.11 per ounce, while December gold futures advanced 0.5% to $2,463.85 per ounce as of 01:09 ET (05:09 GMT).
Gold’s uptick comes as traders shift away from the dollar ahead of a Federal Reserve meeting later in the day. The Fed is anticipated to maintain current interest rates, but market participants are keenly awaiting any hints regarding future rate cuts, influenced by recent soft inflation data and dovish remarks from Fed officials.
Market consensus points to a likely 25 basis point reduction in rates in September, which would lower the opportunity cost of holding gold and thus support its price.
The precious metal also gained from increased safe haven buying triggered by reports of Hamas leader Ismail Haniyeh’s death from an Israeli strike in Iran. This incident signals a possible intensification of the ongoing conflict between Israel and Hamas, which has continued for nine months without a ceasefire.
Tensions in the Middle East, exacerbated by prior missile exchanges between Iran and Israel and recent Israeli strikes on Hezbollah in Lebanon, have further heightened the appeal of gold and other safe-haven assets.
Among other precious metals, platinum futures increased by 0.7% to $976.75 per ounce, while silver futures climbed 0.8% to $28.745 per ounce.
In industrial metals, copper prices rebounded from near four-month lows. This recovery was driven by weak purchasing managers index (PMI) data from China and positive comments from the Chinese government about potential stimulus measures. Benchmark copper futures on the London Metal Exchange rose by 1.7% to $9,123.50 per tonne, and one-month copper futures increased by 1.1% to $4.1368 per pound.
China’s manufacturing sector contracted for a third consecutive month in July, with non-manufacturing growth also slowing. However, recent statements from China’s Politburo promising more stimulus, especially to boost consumer confidence, have raised expectations for additional economic support, despite analysts advising caution on the execution of these measures.
