Gold Extends Rally as Rate-Hike Fears Fade, Fed Minutes in Focus

Gold prices extended their winning streak to a third session on Tuesday, buoyed by waning expectations of an imminent U.S. interest rate hike. Investors are now turning their attention to the release of the Federal Reserve's latest meeting minutes, scheduled for Wednesday, for fresh signals on the central bank's monetary policy trajectory.

Spot gold was trading 0.4% higher at $4,431.09 per ounce, while U.S. gold futures for December delivery gained 0.3% to reach $4,487.70. The precious metal's advance was supported by a subdued U.S. dollar, which makes dollar-priced commodities more affordable for holders of other currencies.

Market sentiment has shifted notably in recent weeks. After unexpected job losses in July, softer-than-expected consumer price inflation, and weaker retail sales data, traders now assign a nearly 65% probability that the Fed will hold its key interest rate steady at its September meeting. A majority of economists polled by Varta Wire also expect the central bank to keep rates unchanged through the end of the year.

Gold typically performs well in a low-interest-rate environment, as it reduces the opportunity cost of holding non-yielding assets. The upcoming Fed minutes are expected to provide deeper insight into policymakers' thinking on the economy and the path of future rate decisions.

In other metals, spot silver rose 0.8% to $66.33 per ounce, platinum climbed 0.5% to $1,779.50, and palladium held nearly steady at $1,332.50.

Meanwhile, geopolitical tensions remain in focus after a senior Iranian official indicated that Tehran would shift to a "fully offensive" military posture, citing stalled negotiations with Washington over a permanent end to the war. The U.S. has reportedly ruled out extending a temporary ceasefire agreement.