Gold rose after Federal Reserve officials hinted that U.S. interest rates could rise more slowly than expected, while palladium hit a new 16- year high, supported by strong industrial metals markets.
The minutes of the Fed's July 25-26 policy meeting showed some policymakers wished to halt further rate increases until it is clear the trend of soft inflation is transitory.Gold is sensitive to rising interest rates because they push up bond yields, raising the opportunity cost of holding non-yielding bullion, and tend to strengthen the dollar, in which gold is priced. The dollar and bond yields fell after the minutes were released but have recouped some losses.
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