Gold prices rise on Fed rate-cut hopes, geopolitical risks
Mon July 29 2024
Gold prices firmed on Monday amid expectations of a U.S. rate cut in September and rising geopolitical tensions in the Middle East, while focus shifted to the Federal Reserve's policy meeting due later this week.
FUNDAMENTALS
* Spot gold was up 0.5% at $2,397.65 per ounce, as of 0025 GMT. U.S. gold futures climbed 0.7% to $2,396.70.
* The U.S. central bank's Federal Open Market Committee meets on July 30-31 and is expected to keep rates unchanged at 5.25%-5.50%. However, softer U.S. jobs data in June, cooling and comments from top Fed officials have prompted the rate futures market to fully price in a 25 basis-point cut in September.
* Bullion, historically reputed for its stability as a favoured hedge against geopolitical and economic risks, thrives in a low-interest rate environment.
* On the geopolitical front, Israel's security cabinet authorized Prime Minister Benjamin Netanyahu's government to decide on the "manner and timing" of a response to a rocket strike in the Israeli-occupied Golan Heights that killed 12 teenagers and children, and which Israel and the United States blamed on Lebanese armed group Hezbollah.
* The ADP national employment report and non-farm payrolls report are the main data points due this week.
* Gold premiums in India jumped to their highest level in a decade last week, as the government's move to cut import duties brought down domestic prices, igniting a surge in demand. [GOL/AS]
* Spot silver gained 0.9% at $28.14 per ounce, platinum rose 0.9% to $943.40 and palladium was up 1.1% at $909.71.