NEW YORK: Gold prices rebounded and looked set to scale a fresh peak on Thursday, on mounting expectations for another US interest rate cut this year, while investors awaited Federal Reserve Chair Jerome Powell’s address later today for more policy cues.
Spot gold climbed 0.4% to $2,668.05 per ounce, as of 0913 GMT, a few dollars away from the record $2,670.43 it hit on Wednesday. US gold futures were up 0.2% to $2,691.20.
“Gold price strength is feeding on itself just now. That’s to say momentum is driving speculative flows despite a rising US dollar and Treasury yields,” said independent analyst Ross Norman. “Powell’s comments will be observed for indications about the depth of further cuts. But really it’s a case of when, not if.”
Last week, the Fed trimmed the benchmark policy rate by 50 basis points to 4.75%-5.00%. Traders now see a 62% chance of an additional 50 bps reduction in November, according to the CME FedWatch Tool. Lower interest rates boost non-yielding gold’s appeal. Powell is set to give opening remarks later in the day at a conference, where New York Fed President John Williams and Fed Vice Chair for Supervision Michael Barr will also speak.
Markets will also scan the US jobless claims data on Thursday and the core personal consumption expenditure index - the Fed’s preferred inflation indicator - on Friday. Bullion has risen more than 29% so far in 2024, hitting record highs several times, fuelled by the US rate cuts, safe-haven demand due to geopolitical and economic uncertainty and robust central bank buying.
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