GOLD prices inched up on Wednesday (Feb 22), as investors awaited the minutes of the US Federal Reserve’s latest policy meeting that could offer clues on further interest rate hikes.

Spot gold was up 0.1 per cent at US$1,836.43 per ounce, as of 0056 GMT. US gold futures firmed 0.2 per cent to US$1,845.20.

Investors are awaiting the release of the minutes of the Fed’s latest meeting due at 1900 GMT on Wednesday. The US central bank had raised rates by 25 basis points (bps) at its Jan 31-Feb 1 meeting.

Money markets expect the US central bank to raise benchmark rates above 5 per cent by May and remain above 5 per cent through the year.

Bullion is seen as a hedge against inflation, but rising interest rates dull the non-yielding asset’s appeal.

The dollar index eased 0.1 per cent, making greenback-priced bullion less expensive for buyers holding other currencies.

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US business activity unexpectedly rebounded in February, reaching its highest level in eight months, according to a survey on Tuesday, which also showed inflation subsiding.

Benchmark 10-year note yields hit their highest since November last year.

Other data on Tuesday showed US existing home sales dropped to the lowest level in more than 12 years in January, but the pace of decline slowed.

Spot silver edged 0.2 per cent higher to US$21.86 per ounce, platinum rose 0.1 per cent to US$943.67 and palladium firmed 0.3 per cent to US$1,530.36. REUTERS