Investing.com– Gold prices rose marginally in Asian trade on Wednesday as political turmoil in South Korea spurred some safe haven demand, although anticipation of more cues on U.S. interest rates kept traders to the sidelines.
The yellow metal saw some relief this week as fears of a collapse in the Israel-Hezbollah ceasefire also spurred haven demand. But any gains in gold were largely limited by a spike in the dollar, as the greenback soared on uncertainty over the long term outlook for U.S. rates.
rose 0.1% to $2,646.53 an ounce, while expiring in February rose 0.1% to $2,668.60 an ounce by 23:25 ET (04:25 GMT).
S.Korea in focus after failed martial law declaration
South Korea President Yoon Suk-Yeol declared martial law on Tuesday, although he swiftly rescinded the move after it was heavily opposed by the Parliament and citizens.
The Parliament entirely voted against martial law, while South Korea’s opposition party also called for Yoon’s impeachment, putting the country into its worst political crisis since the 1980s.
Political uncertainty in the country undermined investor sentiment across Asia, given that South Korea is regarded as a pillar for the East Asian economy. This spurred some safe haven demand for gold.
Increased tensions between Israel and Lebanon also spurred some safe haven buying, after Israel threatened to hold Lebanon’s government accountable for a collapse in its ceasefire with Hezbollah. Both Israel and the militant group launched strikes against each other over the past week, violating a U.S.-brokered truce.
Metal markets pressured by dollar strength before Powell speech
Broader metal prices were muted on Wednesday as traders awaited an address by for more cues on interest rates.
Powell is set to speak later in the day, with his address coming just weeks before the Fed’s final meeting for the year.
While the central bank is expected to cut rates by 25 basis points in December, the long term outlook for rates has grown more uncertain in the face of sticky inflation and inflationary policies under Trump.
This uncertainty sparked sharp gains in the , pressuring metal prices across the board.
Other precious metals, including and , moved little on Wednesday. Among industrial metals, benchmark on the London Metal Exchange fell 0.3% to $9,096.0 a ton, while February fell 0.2% to $4.1895 a pound.