BENGALURU: Gold started the new year on a solid note after ending a volatile 2022 largely unchanged, with prices rallying to a more than six-month peak on Tuesday as investors positioned for the Federal Reserve’s latest policy minutes.

Spot gold rose 0.8 percent to $1,838.54 per ounce by 1000 GMT, having hit a high since June 17 last year. US gold futures gained 1 percent to $1,844.70.

Benchmark US 10-year Treasury yields fell to their session lows, reducing the opportunity cost of holding gold, which does not pay any interest.

“Alternatively, the new year is supporting new inflows into all asset classes,” said UBS analyst Giovanni Staunovo.

However, “we continue to see rising US interest rates and lower US inflation as a headwind for gold, but look for higherprices later in the year, when the Fed rate hikes are expected to end,” Staunovo said.

The market focus now turns to the minutes from the Fed’s December policy meeting due on Wednesday and other economic data expected this week.

While gold is seen as a hedge against economic uncertainty, it tends to loose its appeal in a higher interest rate environment.

Bullion posted a yearly loss in 2022, albeit a small one, as hawkish Fed policies fueled a dollar rally that challenged the precious metal’s role as a safe haven.

“The de-dollarization seen by several central banks last year, when a record amount of gold was bought look set to continue, thereby providing a soft floor under the market,” according to a Saxo Bank note.

On a technical front, above $1,842, the 50 percent of the 2022 correction, gold will be looking for resistance at $1,850 and $1,878 next, the note said.

Elsewhere, spot silver rose 1.6 percent to $24.37 per ounce, platinum scaled 1.4 percent to $1,083.98, and palladium advanced 0.6 percent to $1,805.01.