Gold inches higher, focus on Fed minutes

Gold prices nudged upward in the early Asian trading session on Wednesday as U.S. Treasury yields retreated from their recent peaks, while investors waited for the Federal Reserve's meeting minutes to be released. Spot gold rose 0.2% to $4,342.33 per ounce by 0030 GMT, following a dip of nearly 2% on the previous day. U.S. gold futures for December delivery fell 0.6% to $4,396.30.

U.S. interest rates softened slightly, swinging after a worldwide bond selloff that pushed long-term borrowing costs in major economies close to their highest levels in decades. U.S. President Donald Trump stated that no discussions were ongoing with Iran and affirmed that the Strait of Hormuz remained open, in contrast to Iran's claim that the vital waterway remained closed to shipping. The dwindling likelihood of a deal to bring an end to the ongoing six-month conflict elevated oil prices.

Although gold is traditionally seen as a safeguard against inflation, higher rates typically exert downward pressure on gold prices by strengthening the dollar and rendering yield-bearing assets more appealing to investors. The Federal Reserve's release of minutes from their latest policy-setting meeting is scheduled for 1800 GMT.

Presently, traders are betting on a 65% probability of the U.S. central bank maintaining rates steady and a 35% chance of a rate increase in September, according to the CME FedWatch Tool. Meanwhile, the Bank of England will maintain interest rates at 3.75% for the remainder of the year, according to a strong majority of economists surveyed by Reuters.

Silver slipped 0.5% to $62.99 per ounce, platinum rose 0.3% to $1,717.03, and palladium dropped 0.3% to $1,286.73.