Gold Prices Rise to Fresh 9-Month Highs Ahead of Fed Minutes

Investing.com – Gold prices moved higher on Tuesday as investors waited for the publication of the minutes from the latest Federal Reserve policy meeting with expectations for them to confirm the central bank’s dovish policy stance.

At 10:37 AM ET (15:37 GMT), for April delivery on the Comex division of the New York Mercantile Exchange gained $18.25, or 1.38%, to $1,340.25 a troy ounce, its best level since May 14.

At 2:00PM ET (19:00 GMT), the Fed will release the of the Jan. 30 meeting when it left interest rates on hold and pledged to be patient with further interest rate hikes, dropping its guidance that “further gradual” rate rises will be needed.

The central bank also said it could alter the pace of its balance sheet reduction “in light of economic and financial developments”.

Investing.com analyst Darrell Delamaide commented that after reversing course 180 degrees.

“Quantitative tightening, which Federal Reserve chair Jerome Powell likes to refer to as ‘balance sheet runoff’, is no longer on autopilot,” he affirmed.

The dovish shift in tone to the Fed’s message implies a longer pause in rate hikes, which in turn decreases the opportunity cost of holding non-interest bearing gold.

In other metals trading, pressed higher as predictions that demand will rise this year as stricter emissions standards pump demand for the metal used in catalytic converters. At 10:40 AM ET (15:40 GMT), the metal gained 3.24% to $1,452.75 an ounce, a new record high.

“In combination with supply-side issues, the market is going to be in a sizeable deficit this year … potential for better-than-expected demand from China will exacerbate that tightness,” ANZ analyst Daniel Hynes said.

— Reuters contributed to this report.

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