Gold Prices Hold Steady Near Record Highs on Fed Rate Cut Bets
Gold prices stabilized near record highs in Asian trading on Wednesday, recovering from recent losses as traders continued to anticipate further interest rate cuts by the Federal Reserve.
The yellow metal reached record levels in September, but has since been trading within the low-to-mid $2,600 an ounce range as traders factored in a slower pace of rate cuts by the Fed. The stronger dollar, which hit two-month highs, has been putting pressure on metal markets.
Despite this, market expectations of gradual rate cuts in the U.S. have kept gold close to recent peaks, with spot gold rising 0.2% to $2,667.072 an ounce.
Spot gold has been rangebound in the past few weeks, struggling to break new highs as markets anticipated a higher terminal rate for the Fed. While geopolitical tensions in the Middle East initially boosted safe-haven demand for gold, the stronger dollar and signs of economic resilience in the U.S. have tempered these fears.
Nevertheless, gold has seen significant gains this year, hitting multiple record highs on expectations of future interest rate cuts by the Fed. Traders are currently pricing in a 91.1% chance of a 25 basis points rate cut in November, compared to the 50 bps cut in September.
In addition to gold, other precious metals also saw gains on Wednesday as the dollar retreated from recent highs. Silver rose 0.9% to $1,005.30 an ounce, while platinum rose 0.2% to $31.812 an ounce.
Meanwhile, copper prices stabilized after recent losses due to uncertainties surrounding China’s stimulus efforts. Benchmark copper on the London Metal Exchange rose 0.6% to $9,586.50 a ton, while December copper rose 0.4% to $4.3603 a pound.
Recent weak economic data from China, including disinflation and declining exports, has weighed on copper prices as traders wait for more details on the size and timing of China’s stimulus measures.
In conclusion, the financial markets are closely watching the Federal Reserve’s interest rate decisions and China’s economic indicators, as these factors have a direct impact on the prices of gold, silver, platinum, and copper. Investors should stay informed and consider diversifying their portfolios to mitigate risks associated with market volatility.