By David Hodari and Stephanie Yang
Gold prices climbed Thursday after minutes from the Federal Reserve's last meeting, released Wednesday, suggested divided opinions on whether to raise interest rates again this year.
Futures for December delivery rose 0.56 to $1,295.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
Copper prices also gained, rising 0.8% to $3.1200 a pound in New York.
The minutes from the most recent Federal Open Market Committee meeting showed concern among officials about low inflation, and doubts on whether the central bank should keep raising rates this year.
"The Fed seems perplexed on the stubborn, below-target, inflation numbers, and the minutes showed a growing divide between the voting members on when and how aggressively the Fed should tighten," said Peter Hug, global trading director at Kitco Metals.
Gold prices have been pressured this year by strong economic data and higher interest rates. The precious metal pays its holders nothing and struggles to compete with yield-bearing assets when borrowing costs rise.
Data from CME Group showed that 86.7% of traders are betting that the Fed will raise interest rates by December.
"Those dovish Fed minutes are having the dual impact of one, weakening the dollar, and two, underpinning gold," said William Adams, analyst at Fastmarkets.com.
The WSJ Dollar Index was recently down 0.1% at 86.38, making dollar-denominated commodities like gold and copper cheaper for foreign buyers.
The persistence of geopolitical risk was also driving investors to the gold safe haven. "There are reports out of Russia that North Korea is testing long-range missiles, which can reach the U.S. mainland," Mr. Adams said.
Investors were looking ahead for further news from the International Monetary Fund central bankers' conference.
Traders were also looking out for further comments from FOMC members, U.S. producer-price index data, and Chinese monetary supply numbers, all due out by the end of the week.
Write to David Hodari at [email protected] and Stephanie Yang at [email protected]