Gold prices inch higher on US rate-cut bets, Middle East woes
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Gold prices edged higher on Tuesday, steered by bets that the U.S. Federal Reserve would cut interest rates later this year and safe-haven demand for bullion as Gaza ceasefire remains uncertain.
Spot gold was up 0.1% at $2,324.75 per ounce, as of 0148 GMT after rising more than 1% in the previous session.
U.S. gold futures firmed 0.1% to $2,334.30 per ounce.
"Gold has been slowly building a base for the past week, to show demand sits around $2,280. The Fed continue to make noise about the next move likely to be lower, and that's certainly helped shake a few bears out at these lows," said City Index senior analyst Matt Simpson.
Fed Bank of New York President John Williams said on Monday that at some undefined point the U.S. central bank will lower its interest rate target. He did not offer a time table for action but said the economy was overall moving back into better balance.
Traders are pricing in a 64% chance of a Fed rate cut in September, as per CME's FedWatch Tool. Lower rates increase the appeal of holding non-interest bearing gold.
"Concerns that the ceasefire in Gaza may fall through," have also helped bullion, Simpson added.
Investors also closely monitored the latest developments in the Middle East conflict. Palestinian militant group Hamas on Monday agreed to a Gaza ceasefire proposal from mediators, but Israel said the terms did not meet its demands and pressed ahead with strikes in Rafah while planning to continue negotiations on a deal.
Spot silver fell 0.4% to $27.34 per ounce, while platinum gained 0.4% to $957.90.
Palladium ticked 0.3% higher to $980.75.
"China's scrappage scheme could boost electric vehicle sales and lift secondary palladium supply," analysts at Heraeus wrote in a note dated Monday.
