One kilogram gold bar at the YLG Bullion International Co. headquarters in Bangkok, Thailand, Friday, December 22, 2023.
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On Wednesday, following a speech by Federal Reserve Chairman Jerome Powell, there was growing belief that the Federal Reserve would cut interest rates in September, and gold prices continued to hit new records.
spot gold price Gold prices were last up 0.1% at $2,469.50 an ounce after hitting a record high, according to LSEG data. Gold futures rose 0.2% to $2,473.40 an ounce.
Powell said on Monday that the Fed would not wait until inflation reaches the central bank’s 2% target before cutting interest rates due to delays in policy effects. He said the Fed is seeking “greater confidence” that inflation will return to 2%. Monthly inflation fell in June for the first time in more than four years.
This gave market observers confidence. according to To CME FedWatch Tools, traders are convinced that the Fed will cut interest rates in September. As interest rates fall, gold tends to become more attractive compared to fixed-income assets such as bonds.
“Signs of slowing inflation triggered the move. This was followed by weaker economic data,” said Daniel Hynes, senior commodities strategist at ANZ Bank. wrote in the note.
Gold’s appeal as a safe-haven asset has hit new highs in recent months amid escalating tensions in the Middle East and purchases by central banks.
Vivek Dhar, head of mining and energy commodities research at Commonwealth Bank of Australia, said: “Gold’s ability to find support in any situation this year is worth emphasizing.”
“These drivers run counter to a stronger dollar, largely due to the market delaying expectations of a federal funds rate cut,” the research analyst said, adding that gold prices could rise to the bank’s forecast of $2,500 an ounce by the end of the year. above.
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