Gold Prices Surge Amid Geopolitical Tensions and Fed Meeting Anticipation

Gold prices increased by over 1% as investors faced geopolitical risks and awaited the U.S. Federal Reserve's meeting minutes. Gold, a safe-haven asset, also benefits in low-interest-rate environments. Meanwhile, peace talks between Ukraine and Russia, alongside nuclear discussions with Iran, added to the uncertainties influencing gold’s value.

Gold surged over 1% this Wednesday, driven by escalating geopolitical tensions while investors eagerly awaited the minutes from the U.S. Federal Reserve's recent meeting. Spot gold witnessed a 1.7% increase to trade at $4,957.70 per ounce by 9:15 a.m. Eastern Time, marking a significant rise from its previous drop to $4,841.74 on Tuesday.

April delivery U.S. gold futures edged up by 0.5% to $4,977.80. Market analyst Edward Meir from Marex indicated apprehensions regarding tensions between Iran and the U.S. Meanwhile, geopolitical concerns heightened as the first day of U.S.-mediated peace discussions between Ukraine and Russia concluded swiftly in Geneva, with President Zelenskiy critiquing the talks as 'difficult' and accusing Russia of stalling.

Iran on Tuesday announced having set 'guiding principles' with the U.S. for nuclear negotiations, though its foreign minister warned that reaching a final agreement remains distant. As gold, traditionally a safe haven asset, continues to thrive under low-interest environments, investors focus on the Federal Reserve's meeting minutes scheduled for release at 2 p.m. ET, alongside anticipation for upcoming U.S. economic indicators.

(With inputs from agencies.)