Gold rises on dip-buying after more than 2% drop

Gold edged up on Wednesday on dip-buying, after losing more than 2% in the last session on progress in US-Iran talks, while thin trade on account of the Lunar New year holidays across Asia pressured prices.

FUNDAMENTALS

* Spot gold rose 0.2% to USD 4,886.69 per ounce by 0110 GMT, after declining more than 2% to a more than one-week low on Tuesday.

* US gold futures for April delivery were steady at USD 4,904.50.

* The dollar held its ground on the day as geopolitical risks kept markets on edge and investors awaited minutes of the Federal Reserve’s January meeting for cues into future rate cuts.

* A stronger dollar makes greenback-priced bullion more expensive for other currency holders.

* Mainland Chinese, Hong Kong, Singapore, Taiwan, and South Korea markets are closed for the Lunar New Year holidays, which means low volumes and possibly volatile moves, traders said.

* The Fed could approve “several more” rate cuts this year if inflation resumes a decline to the central bank’s 2% target, Chicago Fed President Austan Goolsbee said on Tuesday, downplaying a recent weak consumer price report as masking strong service price increases.

* Markets currently expect three 25-basis-point Fed rate cuts this year, per CME’s FedWatch Tool.

* Non-yielding bullion tends to do well in low-interest-rate environments.

* Meanwhile, Iran and the US reached an understanding on Tuesday on the main “guiding principles” in talks aimed at resolving their longstanding nuclear dispute, but that does not mean a deal is imminent, Iranian Foreign Minister Abbas Araqchi said.

* Meanwhile, negotiators from Ukraine and Russia concluded the first of two days of US-mediated peace talks in Geneva on Tuesday, with US President Donald Trump pressing Kyiv to act fast to reach a deal to end the four-year conflict.

* Spot silver fell 0.8% to USD 72.86 per ounce after dropping over 4% in the last session.

* Spot platinum gained 0.9% to USD 2,025.80 per ounce, while palladium added 0.5% to USD 1,690.54.

(Reporting by Ishaan Arora; Editing by Sumana Nandy)