Gold Prices Reach Record High on Powell’s Rate Cut Hint
Gold Prices Surge Amid Economic Data and Fed Chair’s Comments
Gold prices soared to a new all-time high on Thursday, marking their seventh consecutive daily increase. This surge was driven by sluggish U.S. economic data and Federal Reserve Chair Jerome Powell hinting at potential rate cuts in the coming months to address inflation concerns.
Gold Continues Rally, Reaching New Peaks
Gold rose by 0.3% to $2,155.42 per ounce, with U.S. gold futures also adding 0.2% to reach $2,163.10. The precious metal continued its record-breaking rally, hitting an all-time high of $2,161.09 earlier in the session and showing a strong intra-day winning streak.
Factors Contributing to Gold’s Movement
The uptick in gold prices was attributed to a combination of weak U.S. data and substantial futures buying activity. Marcus Garvey, head of commodities strategy at Macquarie, highlighted that the movement in gold prices seemed influenced by these factors, particularly after Powell’s comments on potential rate cuts.
Impact of Powell’s Remarks on Gold
Gold received a significant boost following Powell’s indication of possible rate cuts in the near future, especially if inflation continues to decrease. Lower interest rates tend to enhance the attractiveness of gold as a non-yielding asset, leading to increased demand.
Market Reactions and Future Projections
Powell’s comments, combined with softening labor market conditions and falling inflation rates, caused U.S. Treasury yields and the dollar to decline. This scenario boosted the appeal of gold as a safe-haven asset, with analysts projecting a short-term target of $2,300 based on technical levels.
Expert Insights and Market Trends
Experts like Jigar Pandit from BNP Paribas’ Sharekhan foresee continued central bank buying due to geopolitical uncertainties and global growth constraints. Gold’s status as a safe investment during uncertain financial climates is expected to persist, further supporting its price trajectory.
Performance of Other Precious Metals
While gold surged, spot silver saw a slight decrease of 0.4% to $24.08, platinum dipped by 0.3% to $904.83 per ounce, and palladium slipped by 1.5% to $1,026.80 after a significant surge in the previous session.
