Gold climbs as interest rate cut hopes grow
Gold prices remained close to a record high on Tuesday as investor focus turned to an upcoming speech by Federal Reserve Chair Jerome Powell. The surge is supported by expectations of further U.S. interest rate cuts and a weaker dollar, both of which make the yellow metal more attractive to investors.
As of 11:47 a.m. PST, spot gold was up 1.88% at $3,753.71 an ounce, according to Mettis Global. December U.S. gold futures also ticked higher by 0.1% to $3,779.50. The U.S. dollar index slipped 0.1%, making dollar-priced gold cheaper for international buyers.
According to Kelvin Wong, a senior market analyst at OANDA, the short-term trend for gold remains bullish, though some technical pullbacks may occur. He pointed to key support levels at $3,710 and $3,690 as potential turning points.
Fed policy and dollar weakness driving metals market
Investors are now watching Powell’s comments closely for new monetary policy signals. His remarks could shape market expectations for the next interest rate decisions.
On Monday, new Fed Governor Stephen Miran warned that not cutting rates aggressively could harm the U.S. job market. His view contrasts with other Fed officials who remain cautious due to persistent inflation.
Last week, the Federal Reserve cut interest rates by 25 basis points, citing softening labor market conditions. More cuts are likely, with the CME FedWatch tool showing a 90% chance of another cut in October, and 75% in December.
Analysts at ANZ noted that slowing global growth, geopolitical tensions, and a weakening dollar would continue to fuel investment demand for gold. They also noted that silver is likely to benefit from continued interest in precious metals.
Elsewhere, silver prices dipped 0.9% to $43.67 an ounce, still near a 14-year high. Platinum slipped 0.3% to $1,412.80, and palladium eased 0.2% to $1,176.44.
