Investing.com - Gold prices edged higher in European trade on Wednesday, moving away from the lowest level in almost two months, as simmering tensions on the Korean peninsula supported demand for safe-haven assets.
Comex gold futures were at $1,224.37 a troy ounce by 3:35AM ET (0735GMT), up $5.20, or around 0.4%. Trade volumes were thin on Tuesday, as U.S. markets remained closed for the Independence Day holiday.
The yellow metal sank around 2% to touch its lowest since May 11 at $1,218.00 on Monday as a stronger dollar and gains in U.S. equities weighed.
North Korea successfully test-launched a first intercontinental ballistic missile on Tuesday, which analysts said could put all of the U.S. state of Alaska in range for the first time.
U.S. Secretary of State Rex Tillerson said that the long-range missile launch indicated a "new escalation of the threat" of President Kim Jong-un's regime and called for global action.
The timing of the launch is significant, coming just days before leaders from the Group of 20 nations are due to discuss steps to curtail North Korea’s weapons programs.
Meanwhile, investors will be eyeing developments in the Middle East, where Saudi Arabia, the United Arab Emirates, Egypt and Bahrain will meet later Wednesday to decide whether to continue sanctions they imposed on Qatar on accusations it was aiding terrorism and courting regional rival Iran.
Looking ahead, the Federal Reserve will release minutes of its most recent policy meeting at 2:00PM ET (1800GMT), as investors search for more clues on how committed the central bank is to hiking rates again this year. They are also looking for any detail on plans to wind back the Fed's massive balance sheet.
Also on the Comex, silver futures ticked up 4.5 cents, or roughly 0.3%, to $16.08 a troy ounce, after falling to $16.02 in overnight trade, a level not seen since early January.
Among other precious metals, Platinum Futures tacked on 0.6% to $911.40, while palladium rose 1.2% to $852.48 an ounce.