Gold prices experienced a rebound in Asian trade after hitting one-month lows, as the precious metal managed to recover from a significant support level breach. The fear of higher U.S. interest rates has kept gold prices rangebound, with the metal briefly dropping below $2,000 an ounce in February due to stronger-than-expected U.S. inflation readings. Despite the recent recovery, gold has remained within a trading range of $2,000 to $2,050 since mid-January.

The challenges faced by gold can be attributed to the sticky U.S. inflation and a hawkish outlook for interest rates. Investors have been closely monitoring the strength of the dollar, which has weighed on gold prices. The recent rise in gold prices, however, shows some resilience in the face of these challenges.

In Asian trade, spot gold rose by 0.3% to $2,019.95 an ounce, while gold futures for April increased by 0.4% to $2,031.15 an ounce. These gains indicate a positive shift in sentiment towards gold, as investors seek safe-haven assets amidst the uncertainty surrounding interest rates and inflation.

The minutes of the Federal Reserve’s end-January meeting are eagerly awaited by market participants, as they are expected to provide further insights into the central bank’s stance on interest rates. The prospect of higher rates for a longer duration negatively impacts gold, as it increases the opportunity cost of investing in the precious metal.

While gold experienced a rebound, other precious metals faced downward pressure. Platinum futures fell by 0.3% and silver futures dropped by 1.3% due to the prevailing notion of higher interest rates.

As the global economic landscape remains uncertain, investors continue to closely monitor the developments in the gold market. The next key milestone will be the release of the Federal Reserve’s meeting minutes, which will provide further cues on the direction of interest rates and their potential impact on gold prices.