London - Gold rose on Wednesday as cautious investors shied away from the dollar ahead of US inflation data and minutes of the Federal Reserve's last policy meeting, awaiting fresh clues on whether interest rates will rise next month.
Expectations that the Fed is on track to increase rates for the first time in nearly a decade have helped push gold to 5-1/2-year lows this year. Rising rates lift the opportunity cost of holding non-yielding bullion, while boosting the dollar.
However, mixed US data and worries over global growth and stability after China devalued the yuan last week have dampened that speculation, allowing gold to climb back above $1,100 an ounce.
Spot gold was up 0.4 percent at $1,122.00 at 09h20 GMT, while US gold futures for December delivery were up $4.30 an ounce at $1,121.20.
“The minutes today will be extremely relevant to gather whether we're still on track for a September rate hike,” Capital Economics analyst Simona Gambarini said.
“There will be a lot of speculation around the timing of the Fed's rate hike, so there will be lots of traders taking bets ahead of that.”
An analysis of the gold charts suggests the metal may have potential to test the three-week high of $1,126 touched last week, and then $1,137, according to analysts at ScotiaMocatta.
“We are cautiously bullish due to the (weakening) impact of the firm dollar, which has been a negative weight on the metal,” they said in a note.
The dollar was down a quarter of a percent against a basket of currencies on Wednesday. The US unit could benefit if data due at 12h30 GMT shows inflation is rising, analysts said.
Risk aversion weighed on stock markets, with European equities sliding more than 1 percent after a drop in Asian shares to a two-year low overnight.
Spot platinum was up 0.3 percent at $993 an ounce and palladium was down 0.7 percent at $592, both not far off multi-year lows reached earlier this month.
Miner and commodities trader Glencore posted a 29-percent fall in first-half earnings on Wednesday, a day after it said it was considering closing its Eland platinum mine in South Africa due to falling prices.
“The mine produced about 35 000 ounces of platinum in 2014, but was expected to expand significantly,” Macquarie said in a note.
Silver was up 0.5 percent at $14.94 an ounce.
REUTERS