Gold Prices Hold Steady Near Record High as Investors Await Fed Minutes and Powell’s Speech
By Daksh Grover
Gold remained flat near its record high on Tuesday, with investors eagerly anticipating the U.S. Federal Reserve minutes and Chair Jerome Powell’s speech for clues on potential rate cuts this year.
The precious metal was trading at $2,503.05 per ounce by 0514 GMT, just below the all-time peak of $2,509.65 reached on Friday. Meanwhile, U.S. gold futures stood at $2,540.90.
“Gold prices have stabilized in the Asian session, taking a brief pause as buyers defend its new record high,” noted IG market strategist Yeap Jun Rong. He added, “The overall upward trend for gold remains strong, with prices potentially targeting the $2,665 level from a technical standpoint.”
Gold prices have surged over 20% this year on expectations of Fed rate cuts starting in September, solid central bank purchases, and safe-haven demand amid Middle East tensions.
Given that gold does not yield interest, its attractiveness typically rises in a low-rate environment. The Fed is projected to lower rates by 25 basis points at each of the remaining three meetings in 2024, with most economists in a Reuters survey downplaying recession fears.
“The decision to cut rates will hinge on whether incoming economic data continues to support the recent weaknesses in key economic indicators,” explained Ole Hansen, commodity strategy head at Saxo Bank.
Traders will keep a close eye on the Fed’s July meeting minutes set for release on Wednesday, as well as Powell’s speech at the Jackson Hole symposium on Friday for further insights.
The U.S. dollar lingered near a seven-month low, providing a boost to dollar-denominated gold.
Additionally, holdings in SPDR Gold Trust (P:), the world’s largest gold-backed exchange-traded fund, surged to a seven-month peak of 859 tonnes on Monday.
Elsewhere in the metals market, spot silver dipped 0.4% to $29.36 per ounce, while platinum rose 0.4% to $957.08 and palladium slipped 0.7% to $925.47.
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Analysis:
The article discusses how gold prices are holding steady near a record high, with investors eagerly awaiting updates from the Federal Reserve regarding potential rate cuts. The surge in gold prices this year is attributed to optimistic expectations of rate cuts, strong central bank buying, and safe-haven demand due to geopolitical tensions. The article highlights the importance of upcoming Fed minutes and Powell’s speech in providing further guidance to investors. Additionally, the weakening U.S. dollar has been supporting gold prices, while holdings in the SPDR Gold Trust have reached a seven-month high. Overall, the article emphasizes the significance of these developments in the precious metals market and their implications for investors.