Gold scales 2-week high as Fed nods to likely Sept rate cut
Gold prices climbed to a two-week high on Thursday as U.S. Federal Reserve Chair Jerome Powell opened the door to cutting interest rates as early as September. Spot gold was steady at $2,448.38 per ounce, as of 0217 GMT, after hitting its highest level since July 18 earlier in the session. Prices were just about $35 shy of the record high of $2483.60 scaled on July 17.
U.S. gold futures firmed 0.8% to $2,492.50. "Gold bulls couldn't resist
the urge to buy more gold after the Fed effectively signalled the beginning of
its rate-cut cycle. But gold bugs may want to warrant some caution above
$2,500, given gold's reluctance to hold on to gains around these levels," City Index senior analyst
Matt Simpson said.
Fed Chair Jerome Powell said on Wednesday rates could be cut as soon as
September if the U.S. economy follows its expected path, putting the central
bank near the end of a more than two-year battle against inflation but square
in the middle of the nation's presidential election campaign.
Zero-yield gold tends to thrive in a low interest rate environment. Market focus shifts to Friday's U.S. payrolls report. "If the data comes in much hotter than expected, that could dent gold as we head towards the weekend,"
Simpson added.
Elsewhere, Hamas leader Ismail Haniyeh
was assassinated in the Iranian capital Tehran early on Wednesday morning, an
attack that drew threats of revenge on Israel and fuelled further concerns that
the conflict in Gaza
was turning into a wider Middle East war.
Geopolitics is increasingly
more supportive for gold in the medium and long term, said Nicky Shiels, head
of metals strategy at MKS PAMP SA in a note. Spot silver fell 0.3% to $28.94
per ounce, platinum lost 0.3% to $973.65 and palladium was flat at $925.16.