Safe-haven gold heads for monthly gain on Mideast worries, Fed
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Safe-haven gold heads for monthly gain on Mideast worries, Fed
(Reuters) - Gold prices firmed on Wednesday following the killing of a Hamas leader in Iran, on track for a monthly gain driven by optimism about potential US interest rate cuts as focus shifts to the Federal Reserve's upcoming policy decision.
Spot gold was up 0.5% at $2,420.00 per ounce, as of 1147 GMT, and has gained more than 4% this month. US gold futures were up 0.6% to $2,418.10.
The dollar index (.DXY), opens new tab was down 0.5%. A weaker dollar makes bullion more attractive to buyers holding other currencies.
"I think we're seeing a weakening of the US dollar, which is always positive for gold. This weakening is related to, on one hand, expectations that the Fed will adopt somehow a positive stance towards cutting rates in September," said Ricardo Evangelista, senior analyst at ActivTrades.
"On the other hand, we're also seeing an escalation in geopolitical tension with the assassination, apparently, by Israel of Ismail Haniyeh, one of the political leaders of Hamas in Iran."
Bullion, traditionally known for its stability as a favoured hedge against geopolitical and economic risks, thrives in a low-interest rate environment.
As the Fed concludes its two-day meeting later in the day, it is expected to maintain current interest rates. Investors will be closely watching Fed Chair Jerome Powell's press conference for any hints about the timing of potential rate cuts, possibly as soon as September.
