Gold prices climbed in Asian trade on Wednesday, buoyed by a softer dollar as traders keenly awaited signals from the Federal Reserve on potential interest rate cuts. The precious metal also drew strength from safe haven buying amid escalating geopolitical tensions.

Spot gold edged up 0.3% to $2,419.11 an ounce, while gold futures for December delivery increased by 0.5% to $2,463.85 an ounce by 01:09 ET (05:09 GMT).

The market’s attention is focused on the Fed’s meeting, with widespread expectations that the central bank will maintain current interest rates. However, traders are closely watching for any indications of future rate cuts, particularly in light of recent dovish comments from Fed officials and softer inflation readings. The general consensus is leaning towards a 25 basis point cut in September, a move that would favor gold by reducing the opportunity cost of holding the metal.

In addition to economic factors, gold prices have been supported by geopolitical developments. Reports of the killing of Hamas leader Ismail Haniyeh in an Israeli strike in Iran have raised concerns about a potential escalation in the long-standing Israel-Hamas conflict, now entering its ninth month with no clear resolution in sight. The situation heightens the risk of broader regional instability, especially given the recent missile exchanges between Iran and Israel and Israel’s strikes on the Iran-backed, Lebanon-based Hezbollah.

These developments have driven investors towards gold, a traditional safe haven asset, as uncertainties in the Middle East grow. As tensions continue to simmer, the appeal of gold as a protective investment is likely to remain strong.