Gold, since it does not earn interest, tends to rise when rates are low. Powell said Wednesday that continued inflation progress is “not guaranteed,” although the Fed still expects to reduce its benchmark rate this year.
Prices of gold reach their highest level in historya, driven by the strengthening of expectations of interest rate reductions in the United Statesfollowing comments from the chairman of the Federal Reserve, Jerome Powell. Furthermore, geopolitical risks also favored the ingot.
Thus, spot gold registered an advance of 0.3%, reaching US$2,154.79 per ounce, after reaching an all-time high of $2,164.09 earlier in the session. Gold futures in the United States register an increase of 0.2%, reaching $2,162.
According to Joseph Cavatoni, market strategist at the WGC, Expectations of rate cuts are the main driver of gold metal prices, since they are expected to materialize this year. Furthermore, he noted that gold purchases by central banks continue to be very solid.
Gold, since it does not generate interest, tends to increase when rates are low. Powell expressed on Wednesday that the continued progress of inflation “It is not guaranted“, although the Fed still hopes to reduce its reference rate this year.
Gold: after Powell’s words
Powell’s remarks, along with weaker conditions in the labor market, put downward pressure on US Treasury yields and the dollar, generating increased demand for gold.
HSBC precious metals analyst James Steel said geopolitical risks are contributing to bullion’s rise in value. “We only have a limited group of assets that investors can truly consider as safe havens, and gold is number one among them.“he highlighted.
Regarding other precious metals, spot silver experienced an increase of 0.8%, reaching $24.34 per ounce; platinum rises 1.5%, reaching $921.15; and palladium falls 0.1%, standing at $1,041, after having skyrocketed up to 12% in the last session.
Source: Ambito
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