(Bloomberg) -- Gold held above $1,800 an ounce as investors took a risk-off turn before the release of Federal Reserve meeting notes that should bring fresh insight on U.S. monetary policy.
Minutes from the Fed’s June gathering will be combed for more clues on the bank’s thinking around rates, bond-purchasing and the economic outlook. Gold is eyeing its highest close in three weeks as softer inflation-adjusted Treasury yields boost the metal’s appeal following its worst month since 2016 in June.
Gold has had a volatile year, with June’s steep decline driven by rising Treasury yields, a stronger dollar, and bets that governments will begin reining in pandemic stimulus. But lingering economic risks were highlighted in weaker-than-expected figures on the U.S. services sector.
“The risk off tone saw investor demand for the safe-haven asset rise,” Australia and New Zealand Banking Group Ltd. said in an emailed note. Stocks fell in Asia, tracking U.S. declines, amid renewed concerns about the economic recovery.
Bullion rose 0.3% to $1,801.83 by 7:08 a.m. London time. Silver, platinum and palladium rose.
“Following recent economic updates, monetary policy is expected to remain loose as concerns about inflation and rapid economic growth fade,” Naeem Aslam, chief market analyst at Ava Trade Ltd., wrote in a note. This is also one of the reasons for the decline in bond yields and the scenario may persuade institutional investors to hold gold, which could cause the price to rise above $1,900, he wrote.