• Gold gained on Wednesday en route to snap a three-session losing streak on expectations the U.S. Federal Reserve and other major central banks would adopt a dovish approach to monetary policy, while silver soared to a more than one-year high.
Spot gold was up about 0.5% at $1,423.30 an ounce as of 1:41 p.m. EDT (1741 GMT), below last week’s peak of $1,452.60. U.S. gold futures settled 0.1% higher at $1,423.60.
• “Much (of the gains in gold) have to do with expectations related to a Fed rate cut. If you get a rate cut, the opportunity cost of holding gold decreases and we will see more inflows into gold,” said Natixis analyst Bernard Dahdah.
• Investors expect the U.S. central bank to cut its overnight benchmark lending rate at its July 30-31 policy meeting.
• Apart from expectations for dovish central bank policy globally, bullion is also being supported by U.S.-Iran tensions and ongoing trade war, Meger added.
A U.S. Navy ship took defensive action against a second Iranian drone in the Strait of Hormuz last week, but did not see the drone go into the water, the U.S. military said on Tuesday.
• Silver gained 1.2% to $16.60 per ounce. It touched $16.64 earlier in the session, its highest in over an year.
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