Spot gold was up 0.4% to $1,755.73 an ounce by 0321 GMT. US gold futures rose 0.6% to $1,755.90.
Lower interest rates increase the appeal of gold compared to other interest-bearing assets. High interest rates this year have put a brake on gold’s traditional status as a hedge against high inflation and other uncertainties.
The minutes of the November 1-2 Fed meeting showed that a “significant majority” of Fed policymakers agreed that it would “probably soon be appropriate” to slow the pace of rate hikes.
Fed fund futures are now assuming an 85% chance of a 50 basis points (bps) hike at the December meeting, after four consecutive 75 bps hikes.
“The FOMC release and the markets’ perceived reaction to slowing rate hikes – in addition to the extreme seasonal pattern of purchases in late November-December through the end of the first quarter – has driven metal markets in Asia higher,” said David Mitchell, managing director. at Indigo Precious Metals in Singapore.
For further stimulus for gold and precious metals in general, the dollar was generally lower after the Fed’s minutes. A weaker dollar makes precious metals cheaper for foreign buyers.
However, according to Reuters technical analyst Wang Tao, spot gold could end its bounce around a technical resistance of $1,757 an ounce and then resume its decline.
Market activity is likely to be relatively weak due to the US Thanksgiving holiday.
Demand for physical gold in Asia remained soft this week, with premiums in main hub China declining further after new COVID-19 restrictions reduced activity, while higher domestic prices deterred most buyers in India.
Spot silver rose 0.5% to $21.62 an ounce, platinum added 0.3% to $999.38, while palladium gained 0.7% to $1,894.75.