Gold Prices Firm as Markets Await Fed Minutes, Oil Gains

Gold prices edged higher in early Asian trading on Wednesday, recovering some ground after a sharp decline in the previous session. The modest uptick came as U.S. Treasury yields pulled back from recent highs, offering some relief to the non-yielding metal.

Spot gold was up 0.2% at $4,342.33 per ounce, following a nearly 2% drop on Tuesday. Meanwhile, U.S. gold futures for December delivery slipped 0.6% to $4,396.30.

The move in yields was part of a broader global bond selloff that has pushed long-term borrowing costs in major economies toward multi-decade highs. Investors are now turning their attention to the release of the Federal Reserve's meeting minutes, due at 1800 GMT, for clues on the central bank's policy trajectory.

Market pricing currently reflects a 65% probability that the Fed will hold rates steady in September, with a 35% chance of a hike, according to the CME FedWatch Tool.

Adding to the complex picture, oil prices rose after U.S. President Donald Trump said no talks were taking place with Iran and insisted the Strait of Hormuz remained open, contradicting Iran's claim that the waterway was shut. The fading prospects of a deal to end the nearly six-month conflict have driven energy prices higher.

Rising energy costs could strengthen the case for higher interest rates to curb inflation, even as recent U.S. data showed unexpected employment losses, milder inflation, and weak July retail spending. While gold is often viewed as an inflation hedge, higher rates typically weigh on the metal by boosting the dollar and making yield-bearing assets more attractive.

Elsewhere, the Bank of England is widely expected to keep interest rates unchanged at 3.75% for the rest of the year, according to a majority of economists polled.

Among other precious metals, spot silver fell 0.5% to $62.99 per ounce. Platinum gained 0.3% to $1,717.03, while palladium slipped 0.3% to $1,286.73.