Gold Catches Its Breath After Record High as Rate Cut Prospects Increase at the Fed
Gold prices paused in Asian trading on Thursday after nearing record highs in the previous session, following indications from the Federal Reserve that it might cut interest rates in September.
- The yellow metal also saw increased demand as a haven amid growing concerns about a larger war in the Middle East. Spot gold held steady at $2,446.41 per ounce, while gold futures for December delivery rose 0.7% to $2,490.15 per ounce.
- Bullion prices surged sharply on Wednesday, approaching a record high of $2,483.78 per ounce after the Federal Reserve kept interest rates steady, as widely expected.
- Federal Reserve Chairman Jerome Powell pointed to further progress in reducing inflation and calming the labor market, clearly indicating the possibility of a rate cut in September based on more encouraging data.
- The Federal Reserve aims to monitor further inflation and labor market readings before its next meeting, with markets pricing in a 25 basis point cut in September, according to CME Fedwatch.
- A rate cut is a positive scenario for gold, as it reduces the opportunity cost of investing in non-yielding assets.
The focus is now on the key non-farm payroll data for July, which is due tomorrow.
- Meanwhile, platinum futures fell 0.2% to $984.40 per ounce, while silver futures rose 0.5% to $29.070 per ounce.
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