Gold Prices Hold Steady as Record Highs Loom, Eyes on Fed’s Powell
Gold prices remained stable in Asian trading as record highs were reached this week, driven by expectations of lower U.S. interest rates that weakened the dollar and increased demand for the precious metal.
Other metal prices also edged higher, benefiting from a weaker dollar and declining Treasury yields, although gains were tempered by a general risk-off sentiment in the markets.
Gold inched up 0.1% to $2,515.44 an ounce, while futures for December delivery rose by the same margin to $2,553.35 an ounce. Spot prices set a new record of $2,531.72 an ounce on Tuesday.
Gold Supported by Rate Cut Speculations; Market Awaits Powell’s Speech
Gold and other metal prices were primarily buoyed by expectations that the Federal Reserve will start reducing interest rates in September.
Traders were divided on whether the rate cut would be 25 or 50 basis points, according to reports.
All eyes are on Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Symposium on Friday, where he is anticipated to further express the Fed’s dovish stance. However, analysts do not predict Powell to explicitly hint at potential rate cuts.
The minutes of the Fed’s late-July meeting are also set to be released later today, following the central bank’s dovish tone during the gathering.
The possibility of lower rates is positive for gold as it reduces the cost of investing in non-yielding assets.
This sentiment, coupled with recent weakness in the dollar, drove gains in metal markets. However, most of the buying interest was focused on gold, while other precious metals saw only marginal increases.
Silver slipped 0.1% to $956.25 an ounce, while platinum rose 0.1% to $29.538 an ounce.
Copper Steadies Amid Signs of Improved China Demand
Copper prices inched up on Wednesday, continuing a recovery from recent lows on indications of stronger demand in China, the world’s top copper importer.
The benchmark copper on the London Metal Exchange increased by 0.4% to $9,222.50 a ton, while one-month copper rose by 0.2% to $2,554.10 a pound.
Data released earlier this week revealed a decline in China’s copper exports in July as local buyers capitalized on lower copper prices. This data suggested an uptick in Chinese copper demand after two consecutive months of declining copper imports.
Despite these positive signs, ongoing economic challenges in China limited overall copper gains, as the country continues to struggle with post-COVID recovery for almost two years.