Analysts: Expectations of further monetary easing by the Federal Reserve may return; easing geopolitical risks are beneficial for gold.

Gold prices edged higher on Wednesday, hitting a near two-week high, mainly supported by a weaker dollar. Marex analyst Edward Meir said that talk of the US potentially ending the war within two to three weeks even without the Strait of Hormuz reopening boosted US stocks and drove gold prices higher. However, renewed inflation expectations could lead to further interest rate increases, limiting upside potential for gold. The market has almost completely ruled out a Fed rate cut this year, whereas before the war, the market had expected two rate cuts this year. OCBC strategist Christopher Wong said that if geopolitical tensions ease further, market expectations for Fed monetary easing could return. In this scenario, real yields are expected to decline, providing support for gold prices. (Jinshi)