Gold notched a fresh record and silver hit a two-year high as two Federal Reserve officials said they still expect the US central bank to cut rates three times in 2024, with Chair Jerome Powell due to speak later Wednesday.
Bullion rose to a fresh peak above US$2,288 an ounce before trading little changed, while silver topped US$26 an ounce. San Francisco Fed President Mary Daly and Cleveland counterpart Loretta Mester — both of whom vote on policy decisions this year — said three reductions were likely over 2024, although there’s no urgency. Lower rates benefit the non-yielding metals.
Gold Hits Record With Silver at Two-Year High | Precious metals gain on expectations for Federal Reserve easing
Gold has climbed by almost 11% this year, hitting a procession of records in the process, on expectations that lower US interest rates are on the horizon. Still, data showing the US economy remains robust have cast some doubt over the probable timing of any reductions by the Fed.
Fed Chair Powell is scheduled to speak later on Wednesday, potentially offering fresh insights into his policy outlook. At the end of the week, nonfarm payrolls figures will also be scrutinized, with healthy employment gains expected, according to a Bloomberg survey.
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Geopolitical concerns have also aided gold this year, with escalating tensions in the Middle East burnishing its haven appeal. Iran has vowed revenge on Israel after blaming it for a deadly airstrike on its embassy in Syria. Meanwhile, US President Joe Biden offered some of his sternest criticism yet of Israel’s conduct in the months since it launched a military campaign against Hamas in Gaza.
Spot gold was up 0.2% to US$2,284.86 an ounce at 1:50 p.m. in Singapore, after touching US$2,288.40. Silver climbed to US$26.5567 an ounce, the highest intraday level since March 2022. Platinum and palladium rose, while the Bloomberg Dollar Spot Index was steady.
A fall in open interest suggests short-covering may have contributed to gold’s recent record, according to Suki Cooper, an analyst at Standard Chartered Plc. The absence of a new catalyst driving the metal higher “makes price action more likely to be choppy and prone to corrections,” she said.
