Gold Prices Rise Marginally Amid Political Turmoil

Gold prices saw a slight increase during Asian trading on Wednesday, driven by political unrest in South Korea which increased safe haven demand. However, expectations for more clarity regarding U.S. interest rates kept many traders cautious.

Despite some relief this week due to concerns over the Israel-Hezbollah ceasefire, gains in gold were somewhat limited as the dollar strengthened on the uncertainty surrounding the U.S. economic outlook.

Spot gold increased by 0.1% to $2,646.53 per ounce, while February gold futures also rose by 0.1% to $2,668.60 per ounce as of 23:25 ET (04:25 GMT).

S.Korea in Focus After Failed Martial Law Declaration

President Yoon Suk-Yeol of South Korea declared martial law on Tuesday but quickly retracted it after facing significant backlash from Parliament and citizens.

The Parliament voted unanimously against martial law, with the opposition party calling for Yoon’s impeachment, marking South Korea’s most severe political crisis since the 1980s.

This political instability dampened investor sentiment across Asia, intensifying the demand for gold as a safe haven asset.

Increased tensions between Israel and Lebanon also fueled safe haven buying, with Israel threatening to hold Lebanon responsible for the breakdown of the ceasefire with Hezbollah, following recent strikes exchanged between the two.

Metal Markets Pressured by Dollar Strength Before Powell Speech

Metal markets remained subdued on Wednesday as traders anticipated a speech from Federal Reserve Chair Jerome Powell that could provide insights into future interest rates.

Powell's address comes shortly before the Federal Reserve's final meeting of the year, with expectations leaning toward a 25 basis point cut in December. However, the outlook remains uncertain due to persistent inflation and economic policies under Trump.

This uncertainty has bolstered the dollar, exerting pressure on metal prices across the board.

Other precious metals like platinum and silver exhibited little movement on Wednesday. Among industrial metals, benchmark copper futures on the London Metal Exchange decreased by 0.3% to $9,096.0 per ton, while February copper futures fell by 0.2% to $4.1895 per pound.