Gold rose in Asia on Wednesday with Fed views on rate hikes for the rest of the year in focus with some expectations that inflation is not strong enough for a third hike this year as forecast.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose 0.29% to $1,247.13 a troy ounce.
Overnight, gold prices remained subdued on Tuesday as the dollar continued to advance amid rising expectations that the Federal Reserve would hike interest rate by the year-end.
Gold futures continued to trickle lower, as a growing number of market participants expect the Federal Reserve to raise rates by the end of the year in the wake of upbeat comments from Federal Reserve officials.
On Tuesday, Boston Fed President Eric Rosengren said low interest rates do pose financial stability concerns that central bankers and the private sector must take seriously. On Monday, Bill Dudley, head of the New York Federal Reserve downplayed the recent slowdown in inflation, adding that halting rate increases at this point would be dangerous.
Meanwhile, Chicago Fed President Charles Evans said on Monday it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise interest rates again.
Bullish comments from Fed officials have surprised investors as economic data has failed to show consistent U.S. economic growth.
The precious metal has continued to slip from its recent high after the Federal Reserve hiked rates last Wednesday, leaving the door open for an additional rate hike this year.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.