Gold Hits Record High after Powell Comments
Prices rise amid safe-haven demand and rate cut expectations
- Gold prices surged to a new record high following comments from Federal Reserve Chair Jerome Powell, which bolstered expectations of future interest rate cuts.
- While Powell offered little clarity on the timing of rate cuts, investors interpreted his remarks as not being strong enough to change gold's upward trend.
- The record price is also fueled by strong safe-haven demand amid rising geopolitical tensions and concerns over the U.S. labor market.
Gold prices surged to a new record high on Tuesday following comments from U.S. Federal Reserve Chair Jerome Powell, driven by continued safe-haven demand and expectations of further interest rate cuts.
The price increase marks the third consecutive day that gold has reached a new peak.
According to Wichit Jaitrong, a Krungthep Turakij reporter, citing Reuters, spot gold rose 0.8% to $3,777.80 per ounce as of 1:45 p.m. Eastern Time, after briefly touching an all-time high of $3,790.82 earlier in the day.
U.S. gold futures for December delivery also climbed, closing up 1.1% at $3,815.7.
The surge comes as geopolitical tensions rise, with NATO warning Russia it will use "all necessary military and non-military tools" to defend itself after Moscow's alleged violation of Estonian airspace.
This, combined with growing concerns about the U.S. labour market, has led investors to seek the security of gold.
During a speech, Powell offered little clarity on the timing of the next rate cut, stating the central bank faces a "challenging situation" with risks of higher-than-expected inflation and weakening job growth.
Despite this, investors remain confident, with many anticipating further rate cuts in October and December.
"The gold market understood that there was nothing in his remarks that was significant enough to change gold's upward trend," said Bob Haberkorn, a senior market strategist at RJO Futures.
Attention now shifts to the release of the U.S. Personal Consumption Expenditures (PCE) index on Friday, a key measure of inflation for the Fed.
Meanwhile, other precious metals also saw gains. Spot silver rose 0.2% to $44.17 per ounce, near a 14-year high. Platinum jumped 4.5% to $1,480.97, its highest level since 2014, and palladium increased by 2.8% to $1,212.
