* Dollar declines from more than a year high
* Focus on US Federal Reserve Minutes until 18:00 GMT.
* Banks are preparing to abandon contracts for gold and silver on the LME (added comments, graphics, updated prices)
Oct 13 (Reuters) – Gold prices surged 2% Wednesday as both the dollar and the US Treasury weakened and investors focused on minutes from the last Federal Reserve meeting to reaffirm their cutback strategy.
Spot gold rose 1.9% to a nearly four-week high of $ 1,793.86 an ounce by 12:09 pm ET (1609 GMT). US gold futures jumped 2.1% to $ 1,795.60.
Other precious metals followed, with spot silver up 2.7% to $ 23.15 an ounce, platinum up 1.2% to $ 1,018.96, and palladium up 3.4% to 2114. $ 71.
“Gold is currently only following yields. The first reaction to the CPI (consumer price index) data was a big jump in profitability, which is now starting to fade, ”said Daniel Pavilonis, senior market strategist at RJO Futures.
Gold initially cut earnings as the yield on 10-year US Treasuries surged above 1.6% after data showed US consumer prices rose steadily in September and were poised for further gains in the coming months.
But the subsequent downturn in yields, which lowered the opportunity cost of owning interest-free gold, sparked a strong rally in precious metals.
The metal also received support from the fall in the dollar and fears that high inflation would hit global growth.
“Inflationary expectations, mixed with concerns about global growth, have made many investors nervous that businesses and consumers will be much weaker in the second half of 2022. The flow of safe havens is starting to appear in the path of gold, ”said Edward Moya, senior analyst at the brokerage market. OANDA, the note says.
Now investors are awaiting the release of the minutes of the September meeting of the US central bank at 18:00 GMT amid expectations of a reduction in economic support as early as next month.
Meanwhile, a group of banks that have partnered with the London Metal Exchange to launch gold and silver futures in 2017 are preparing to abandon the project after expected volumes have not materialized.
Report by Bridgesh Patel from Bangalore; Editing by Aditya Sonya and Vinay Dvivedi
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