Investing.com — Gold prices rose marginally on Wednesday as political unrest in South Korea fueled safe-haven demand, although expectations of more signals on U.S. yields limited gains.
At 09:20 ET (14:20 GMT), the price rose 0.1% to $2,646.58 per ounce, while the February maturity rose 0.1% to $2,669.20 per ounce.
South Korea in focus after failed declaration of martial law
South Korean President Yoon Suk-Yeol declared martial law on Tuesday, although he quickly withdrew the move after strong opposition from parliament and citizens.
Parliament voted completely against martial law, while South Korea’s opposition party also called for Yoon’s ouster, plunging the country into its worst political crisis since the 1980s.
Political uncertainty in the country undermined investor sentiment across Asia, as South Korea is considered a pillar of the East Asian economy. This stimulated the demand for gold as a safe haven.
Increased tensions between Israel and Lebanon also prompted the buying of safe havens after Israel threatened to hold the Lebanese government responsible for a collapse of the ceasefire with Hezbollah. Both Israel and the militant group launched attacks on each other over the past week, violating a US-brokered ceasefire.
Powell’s speech in pictures
Broader metals prices remained subdued on Wednesday as traders waited for an address for more signals on interest rates.
Powell will speak later in the day after US private payroll growth slowed in November, raising hopes of another rate cut by the Federal Reserve at its final meeting of the year.
Private payrolls rose by 146,000 jobs last month after rising by a downwardly revised 184,000 in October, the ADP National Employment Report showed on Wednesday.
While the central bank is expected to cut rates by 25 basis points in December, the long-term outlook for rates has become more uncertain in light of persistent inflation and inflation policies under Trump.
This uncertainty led to sharp gains in the sector, putting pressure on metal prices across the board.
Among other precious metals, the index fell 1.3%, while remaining largely unchanged on Wednesday.
In industrial metals, the benchmark on the London Metal Exchange fell 0.3% to $9,094.0 per tonne, while February fell marginally to $4.2018 per pound.
(Ambar Warrick contributed to this article.)
The yellow metal saw some relief this week as fears of a collapse in the ceasefire between Israel and Hezbollah also boosted demand for ports. But any gains in gold were largely capped by a spike in the dollar, as the greenback rallied on uncertainty about the long-term outlook for U.S. interest rates.
rose 0.1% to $2,646.53 per ounce, while the February maturity rose 0.1% to $2,668.60 per ounce at 23:25 ET (04:25 GMT).
