Gold drifts near record high amid Fed rate-cut optimism, geopolitical woes
Tue Aug 27 2024
Gold prices held steady on Tuesday, lingering near record highs, as safe-haven demand from rising geopolitical tensions in the Middle East and increasing bets on a U.S. Federal Reserve interest rate cut in September provided support.
FUNDAMENTALS
* Spot gold was flat at $2,515.83 per ounce by 0027 GMT. Bullion hit a record high of $2,531.60 on Aug. 20.
* U.S. gold futures fell 0.2% to $2,551.20.
* Israel issued new evacuation orders for Deir Al-Balah in the central Gaza Strip late on Sunday, forcing more families to flee, saying forces intended to act against militant group Hamas and others operating in the area.
* Gold is historically reputed for its stability as a favoured hedge against geopolitical and economic risks.
* Meanwhile, San Francisco Federal Reserve President Mary Daly on Monday said "the time is upon us" to cut interest rates, likely starting with a quarter-percentage point reduction in borrowing costs.
* Traders have fully priced in a Fed easing for next month, with a 70% chance of a 25-basis-point cut and about 30% chance of a bigger 50-bp reduction, according to the CME FedWatch tool.
* A low interest rate environment tends to boost non-yielding bullion's appeal.
* Data from the Commerce Department on Monday showed that new orders for key U.S. capital goods unexpectedly fell in July, with June's figures revised lower, indicating a slowdown in business equipment spending into the third quarter.
* Gold demand in top consumers India and China is expected to improve in the next few months, industry officials said.
* Spot silver edged 0.2% lower to $29.85 per ounce, platinum fell 0.3% to $959.24 and palladium was flat at $958.50.
Source: http://in.reuters.com