Gold prices remained near record levels on Tuesday, with investors eagerly awaiting upcoming U.S. Federal Reserve minutes and Chair Jerome Powell’s speech for clues on potential rate cuts.
Spot gold was virtually unchanged at $2,503.05 per ounce by 0514 GMT, just below Friday’s all-time high of $2,509.65. U.S. gold futures also held steady at $2,540.90.
“Gold prices have held steady during the Asian session, as the market consolidates near the new record high,” said Yeap Jun Rong, a market strategist at IG. “The broader upward trend for gold remains intact, with potential for prices to test the $2,665 level from a technical standpoint.”
This year, gold has surged over 20% due to expectations that the Federal Reserve will begin rate cuts in September, strong central bank purchases, and safe-haven demand driven by Middle East tensions. Lower interest rates typically enhance gold’s appeal as a non-yielding asset.
The Fed is anticipated to reduce rates by 25 basis points at each of its remaining three meetings in 2024, though a majority of economists in a Reuters poll have downplayed recession risks.
“A rate cut will depend on whether the incoming economic data continues to reflect the recent softness in key indicators,” noted Ole Hansen, head of commodity strategy at Saxo Bank.
Market participants are closely watching the Fed’s July meeting minutes, due Wednesday, and Powell’s speech at the Jackson Hole symposium on Friday for additional guidance.
The U.S. dollar remained near a seven-month low, providing further support to gold prices. Holdings in the SPDR Gold Trust (P
), the largest gold-backed exchange-traded fund, rose to their highest level in seven months at 859 tonnes on Monday.
In other metals, spot silver declined 0.4% to $29.36 per ounce, while platinum increased 0.4% to $957.08. Palladium fell 0.7% to $925.47.
