Weaker Dollar Boosts Gold Prices Amid Rising Global Uncertainty

Gold prices edged higher on Wednesday as the US dollar weakened, providing support to bullion. The spot gold price rose 0.3 per cent to $4,345.20 per ounce, while spot silver remained under pressure and dropped 0.5 per cent to around $63 per ounce.

The weakness in the US dollar is a key factor supporting gold prices. As the dollar index fell 0.1 per cent to 99.62, gold becomes cheaper for holders of other currencies, potentially boosting demand.

However, gains in gold were limited by strength in US Treasury bonds and elevated yields amid rising uncertainty in the Middle East. Higher bond yields typically weigh on gold as they increase the opportunity cost of holding the non-yielding asset.

The market will now turn its attention to the minutes of the Federal Open Market Committee meeting, due later on Wednesday. Investors will look for clues on the Federal Reserve's monetary policy outlook and the likely trajectory of interest rates.