Gold inches higher amid rate cut hopes
Gold prices nudged higher on Tuesday as comments from Federal Reserve chair Jerome Powell bolstered the case for a September rate cut, while investors awaited more US economic data for further monetary policy cues.
Spot gold rose 0.2% to $2,425.69 /oz by 4.24am GMT. On Monday, prices hit their highest level since May 20, when bullion scaled a record peak of $2,449.89. US gold futures gained 0.1% to $2,431.80.
“Powell continued to lay the groundwork for upcoming policy easing. A rate cut in September is now fully priced in by markets, which may keep sentiments in gold prices well-supported in the lead-up,” said IG market strategist Yeap Jun Rong.
Powell said on Monday the three US inflation readings over the second quarter of this year “add somewhat to confidence” that the pace of price increases is returning to the Fed’s target in a sustainable fashion, remarks that suggest a turn to interest rate cuts may not be far off.
When interest rates decrease, the appeal of non-yielding bullion typically increases.
Investors were awaiting US retail sales data due at 12.30pm GMT on Tuesday and comments from Fed governors Christopher Waller and Adriana Kugler later this week for further direction.
A subdued retail sales report could underpin gold prices on dovish Fed bets, while a break to a fresh high would mark a continuation of gold’s broader upward trend, which could leave the $2,600 level on watch next, Yeap said.
Elsewhere, India’s four-week platinum imports from mid-June eclipsed 2023’s total as bullion dealers exploited a loophole by registering alloys containing about 90% gold as platinum to avoid higher duties, government and industry officials told Reuters.
Among other metals, spot silver fell 0.8% to $30.75/oz and platinum eased 0.3% to $992.26, while palladium rose 0.4% to $954.18.