Investing.com– Gold prices edged higher in Asian trading on Wednesday as political unrest in South Korea boosted safe-haven demand, although anticipation of further interest rate guidance Americans kept traders away.
The yellow metal saw some relief this week as fears of a collapse of the ceasefire between Israel and Hezbollah also boosted safe-haven demand. But gold's gains were largely limited by the rise in the dollar, with the greenback soaring on uncertainty over the long-term outlook for US interest rates.
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The price of rose 0.1% to $2,646.53 an ounce, while February expiring rose 0.1% to $2,668.60 an ounce as of 11:25 p.m. ET ( 04:25 GMT).
South Korea in the crosshairs after the failure of martial law
South Korean President Yoon Suk-Yeol declared martial law on Tuesday, although he quickly reversed the measure after it was strongly opposed by Parliament and citizens.
Parliament came out entirely against martial law, while South Korea's opposition party also called for Yoon's impeachment, plunging the country into its worst political crisis since the 1980s.
Political uncertainty in the country has undermined investor sentiment across Asia, given that South Korea is seen as a pillar of the East Asian economy. This has boosted demand for gold as a safe haven.
Heightened tensions between Israel and Lebanon also spurred safe-haven buying, after Israel threatened to hold the Lebanese government responsible for the collapse of the ceasefire with Hezbollah. Israel and the militant group have launched attacks against each other over the past week, violating a U.S.-brokered truce.
Metals markets under pressure from dollar strength ahead of Powell speech
Metal prices were subdued on Wednesday as traders awaited Federal Reserve Chairman Jerome Powell's speech for further guidance on interest rates.
Powell is expected to speak later today, with his speech coming weeks before the Fed's final meeting of the year.
With the central bank expected to cut rates by 25 basis points in December, the long-term outlook for rates has become more uncertain in the face of stagnant inflation and inflationary policies under Trump.
This uncertainty caused significant gains in the , which put pressure on metal prices overall.
Other precious metals, including and, were little changed on Wednesday. Among industrial metals, prices on the London Metal Exchange fell 0.3% to $9,096.0 per tonne, while February saw prices fall 0.2% to $4.1895 per pound.
