Gold rose on Wednesday as markets eagerly awaited the minutes of the Federal Reserve's latest policy meeting.
Spot gold rose 0.6% to $1,865.72 an ounce by noon ET, the highest since June 2021. US gold futures also rose 0.6% to trade at $1,866.60 an ounce in New York.
“Gold is attracting a wide range of investors who are looking for protection, as they also understand that there will be no quick solution to the (Russian-Ukrainian) situation,” Edward Moya, senior market analyst at brokerage OANDA, told Reuters.
“Gold has a clear path up. However, it will have moments where it sells due to more aggressive expectations of a Fed tightening,” Moya added.
U.S. Secretary of State Anthony Blinken said earlier that Russia moved critical units closer to the Ukrainian border on Wednesday.
Rising geopolitical tensions and expectations of a U.S. interest rate hike have weighed on financial market sentiment, forcing investors to seek safe havens such as gold bars.
Investors are now waiting for the minutes of the Fed's February 25-26 policy meeting at 2:00 pm ET, which is expected to shed more light on policymakers' plans to raise interest rates.
The US central bank will begin its tightening cycle in March with a 25 basis point interest rate hike.
“Once the Fed starts raising rates and… if it happens faster than expected, you will see gold fall, but I don’t see a collapse,” said Natixis analyst Bernard Dahda, adding that prices could then fall in a range to $1700 but over $1600.