Gold hovers near record high as market focus turns to US data, Fed minutes

Gold prices rose on Tuesday, hovering near a record peak hit in the previous session, supported by firm central bank buying, while investors watched out for the U.S. Federal Reserve's policy meeting minutes and inflation data for fresh signals.

Spot gold was up 0.2 per cent at $2,343.76 per ounce, as of 0313 GMT, after hitting a record high of $2,353.79 on Monday. U.S. gold futures gained 0.5 per cent to $2,362.60.

"Gold has been the 'asset of choice' in financial markets, with an undercurrent of central bank buying and speculative flows sending the price to higher highs on a regular basis," said Tim Waterer, chief market analyst at KCM Trade.

Along with safe-haven buying, demand added to the bullish mix signalled conditions have been ripe for gold, Waterer added.

The minutes of the Fed's March policy meeting and the U.S. CPI data are due on Wednesday.

The Fed held interest rates steady at 5.25 per cent-5.50 per cent range, but policymakers indicated they still expected to cut them by three quarters of a percentage point by end-2024 at its March policy meeting.

After a strong U.S. jobs report last Friday, the market pared expectations for the number of rate cuts this year to two, from three to four a few weeks ago, according to LSEG's rate probability app.

Higher interest rates reduce the appeal of holding non-yielding gold.

"Inflation data this week poses a risk if the readings come out on the hotter side of the ledger. But gold has been immune this week from rising bond yields, which could be a bullish signal for gold in the medium term," Waterer said. [US/]

Spot silver dipped 0.1 per cent to $27.81 per ounce, after hitting its highest levels since June 2021 earlier in the session.

India's silver imports surged 260 per cent in February to a record high, as lower duties encouraged large purchases from the United Arab Emirates.

Platinum gained 1.6 per cent to $973.35 and palladium rose 1 per cent to $1,053.50.