Gold prices rose on Tuesday, supported by a weaker US dollar and Treasury yields as investors look forward to minutes from the Federal Reserve’s latest meeting for more guidance on its interest rate outlook.
Spot gold was up 0.6 percent at $1,988.29 per ounce. US gold futures gained 0.5 percent to $1,990.10.
“The dollar and the US bond yields continue to come down. Demand from central banks is also quite strong. All these are bullish for gold. The market is reconsidering that drop we saw yesterday,” said Edward Meir, a metals analyst who provides research for Marex.
The dollar languished near more than a 2-1/2-month low as investors expect US interest rates to fall next year. A weaker dollar makes gold less expensive for other currency holders.
Benchmark US 10-year Treasury yields were hovering near two-month lows touched last week.
Minutes from the Fed’s latest meeting are due at 1900 GMT. Signs of slowing inflation in the United States has boosted expectations that the US central bank was done raising interest rates.
Markets are widely expecting the Fed to leave rates unchanged in the December meeting and currently pricing in a greater than 50 percent chance of a rate cut of at least 25 basis points by May, according to CME’s FedWatch Tool.
