Investing.com– Gold prices rose marginally Wednesday as political turmoil in South Korea spurred some safe haven demand, although anticipation of more cues on US interest rates limited gains.
At 09:20 ET (14:20 GMT), rose 0.1% to $2,646.58 an ounce, while expiring in February rose 0.1% to $2,669.20 an ounce.
South 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South Korea President Yoon Suk-Yeol declared martial law on Tuesday, although he swiftly rescinded the move after it was heavily opposed by the Parliament and citizens.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.
Powell’s speech in focus
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, after US private payrolls growth slowed in November, raising hopes of another interest rate cut by the Federal Reserve at its final meeting for the year.
Private payrolls rose by 146,000 jobs last month, after advancing by a downwardly revised 184,000 in October, the ADP National Employment Report showed on Wednesday.
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.
Turning to other precious metals, fell 1.3%, while was largely unchanged Wednesday.
Among industrial metals, benchmark on the London Metal Exchange fell 0.3% to $9,094.0 a ton, while February fell marginally to $4.2018 a pound.
(Ambar Warrick contributed to this article.)
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).