Gold prices rose to a two-week high on Wednesday, supported by technical buying, as investors await the Federal Reserve's meeting next week for clues on interest rate expectations.

Spot gold rose 1.3% to $4,129.43 per ounce after hitting its highest since July 7 earlier today. US gold futures for August delivery jumped 1.4% to $4,134.50.

According to Reuters, rising tensions in the Middle East pushed oil prices higher and exacerbated inflation fears, boosting expectations of interest rate hikes, which led gold to record its biggest weekly drop since early June last week.

Tim Waterer, chief market analyst at KCM Trade, said buyers are heading to the market seeking high-value investment opportunities after the recent decline, and hopes for diplomatic progress between the US and Iran are also contributing to price movements.

According to a Reuters poll, experts expect the Federal Reserve to keep the key interest rate unchanged until the end of 2026.

As for other precious metals, spot silver rose 1.6% to $59.71 per ounce, platinum climbed 1.9% to $1,659.97, and palladium gained 2.2% to $1,310.50.

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