Gold prices edged higher in Asian trade on Wednesday as political turmoil in South Korea spurred safe-haven demand, although anticipation of further cues on U.S. interest rates kept traders on hold.

The yellow metal has seen some relief this week as concerns over a collapse of the Israel-Hezbollah ceasefire also spurred safe-haven demand. However, gold's gains were largely capped by a surge in the dollar, as the greenback surged on uncertainty over the long-term outlook for U.S. interest rates.

Spot gold rose 0.1% to $2,646.53 an ounce, while February gold futures rose 0.1% to $2,668.60 an ounce by 11:25 p.m. ET (04:25 GMT).

South Korean President Yoon Suk-Yeol declared martial law on Tuesday, although he quickly responded to the move after facing strong opposition from Parliament and citizens.

Parliament voted against martial law, while South Korea's opposition party also called for Yoon's impeachment, plunging the country into its worst political crisis since the 1980s.

Political uncertainty in the country has dampened investor sentiment across Asia, as South Korea is seen as an economic pillar of East Asia. This has boosted demand for safe-haven gold.

Rising tensions between Israel and Lebanon have also boosted safe-haven buying, after Israel threatened to hold the Lebanese government accountable for the failure of a ceasefire with Hezbollah. Both Israel and the militant group have been trading blows over the past week, violating a U.S.-brokered truce.

Broader metal prices were lower on Wednesday as traders awaited a speech by Federal Reserve Chairman Jerome Powell for further clues on interest rates.

Powell is due to speak later in the day, with his speech coming just weeks before the Fed's final meeting of the year.

While the central bank is widely expected to cut rates by 25 basis points in December, the longer-term outlook for interest rates has grown more uncertain in the face of stubborn inflation and Trump's inflationary policies.

The uncertainty has fueled a sharp rise in the dollar, weighing on metal prices across the board.

Other precious metals, including platinum and silver, were little changed on Wednesday. Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.3% to $9,096.0 a tonne, while February copper futures fell 0.2% to $4.1895 a pound.

Source: Investing.com