2019.07.2407:07:00UTC+00Gold Crawls Higher Amid Geopolitical Tensions

Gold prices inched higher on Wednesday as rising geopolitical tensions, weakening global growth prospects and expectations of upcoming rate cuts boosted demand for the yellow metal.

Spot gold rose 0.6 percent to $1,426.58 per ounce, after hitting its lowest level since July 17 at $1,413.80 in the previous session. U.S. gold futures were up 0.4 percent at $1,427.05 an ounce.

Gulf tensions remain elevated, with the American military saying the U.S. may have brought down two Iranian drones in the Gulf last week, not one.

Iranian President Hassan Rouhani said today his country was open to holding talks on its nuclear program but would not surrender under the name of negotiation.

Growth concerns linger after the International Monetary Fund on Tuesday cut its forecast for global growth this year and next, citing trade and Brexit uncertainties.

The European Central Bank holds a policy meeting on Thursday and it is expected that the central bank will provide dovish guidance, paving the way for easing in September to stimulate Eurozone growth.

Markets have already priced in a 25 bps rate cut by the U.S. Federal Reserve at its upcoming July 30-31 policy meeting.