Investing.com - Gold prices held just below their highest level in around a year on Wednesday, drawing support from lingering tensions on the Korean peninsula as well as dovish comments from a Federal Reserve official about subdued U.S. inflation.
Comex gold futures were at $1,343.39 a troy ounce by 2:45AM ET (0645GMT), down $1.30, or 0.1%.
The yellow metal rallied on Tuesday to notch its third-straight winning session, after touching its best level since Sept. 8, 2016 at $1,349.70.
Elsewhere on the Comex, silver futures tacked on 3.3 cents, or about 0.2%, to $17.97 a troy ounce. It rose to $18.09 a day earlier, the most since April 21.
Tensions on the Korean Peninsula continued to simmer, with a North Korean diplomat threatening that the country was prepared to deliver "gift packages" to the U.S. if the latter continues to put pressure on Pyongyang.
South Korea has said further missile tests could be expected from North Korea following its last nuclear test on Sunday. Many experts have been preparing for a weapons test around Sept. 9, when the hermit state marks the anniversary of its foundation in 1948.
Geopolitical risks tend to boost demand for safe havens such as gold, which is considered a good store of value during volatility in other markets.
Markets also digested Fed Governor Lael Brainard's comments on Tuesday that the Federal Reserve had to be "cautious about tightening policy," given that inflation was below the central bank's target.
Her dovish comments further dampened expectations that the Fed will raise rates a third time this year, according to Investing.com’s Fed Rate Monitor Tool, with odds for a move by December falling to around 35%.
The U.S. Institute of Supply Management is to release data on August service sector activity at 10:00AM ET (1400GMT) on Wednesday. The gauge is expected to inch up 1.4 points to 55.3. Anything above 50.0 signals expansion.
Besides the services PMI, the Fed's Beige Book is also in focus.
Among other precious metals, platinum added 0.2% to $1,010.45, while palladium advanced 0.5% to $962.05 an ounce.
Meanwhile, copper futures rose 1.9 cents, or 0.6%, to $3.147, not far from the prior session's three-year high, boosted by growing confidence in the global economy.