PT Rifan Financindo Berjangka – Gold Steadies Below Record as Traders Weigh Fed’s Rate Outlook
Gold held a small decline after hitting record high in the previous session, as investors booked in profits and traders considered their bets on Federal Reserve rate cuts.
Bullion was steady in early Asia hours, after dipping on Wednesday from its new record amid signs that the rally had reached overextended levels. The precious metal has seen rapid gains this month as markets ramped up bets on earlier, deeper monetary easing from the Fed following several soft inflation readings. Bullion’s appeal tends to increase as rates fall, as it pays no interest.
A growing chorus of US policymakers have also acknowledged that inflation is cooling toward the central bank’s 2% target. Fed Governor Christopher Waller said Wednesday the economy was getting closer to a point where borrowing costs can be reduced, but indicated he’d like to see a “bit more evidence” cost pressures were on a sustained downward path.
Gold is up nearly 20% since January, with much of this year’s gains fueled by large purchases from central banks, strong consumer appetite in China and demand for haven assets amid geopolitical tensions.
Markets continued to monitor the impacts of what has so far been a tumultuous US election campaign, following the weekend assassination attempt on Republican nominee Donald Trump and persistent doubts over whether President Joe Biden — who tested positive for Covid-19 on Wednesday — will stay in the race.
Momentum-focused players are now also reemerging as a key driver of gold amid a more supportive macro environment. Hedge funds boosted their bullish bets on bullion to a seven-week high in the week ending July 9, according to the latest CFTC data.
Spot gold was flat at $2,459.29 as of 8:52 a.m. in Singapore, after reaching an all-time high of $2,483.73 on Wednesday. The Bloomberg Dollar Spot Index was little changed. Silver was steady, palladium gained, while platinum slipped.
Source: Bloomberg
Gold Extends Record Rally on Fed Rate-Cut Bets, Softer Dollar
Gold prices notched up an all-time high on Wednesday, as growing optimism for an interest-rate cut from the U.S. Federal Reserve in September and a weaker dollar boosted demand.
Spot gold dropped about 0.6% to $2,454.98 per ounce by 1748 GMT due to profit-taking after hitting an all-time high of $2,482.29 earlier in the session. U.S. gold futures settled 0.3% lower to $2,459.90 per ounce.
“The expectation that we are getting closer to a Fed interest rate cut and we’ve seen this as yields continue to slowly grind lower in anticipation, that, along with a weaker dollar, are the main supportive factors behind this gold move,” said David Meger, director of alternative investments and trading at High Ridge Futures.
More Fed policymakers have suggested they are getting increasingly comfortable that the pace of price increases is more firmly on track, back down to the Fed’s goal, after higher-than-expected readings earlier in the year.
Elsewhere, silver fell 3.7% to $30.21 per ounce. Platinum shed 0.4% to $996.30 and palladium dropped 0.5% to $953.93. PT Rifan Financindo Berjangka.
Source : Reuters