PT Rifan Financindo Berjangka – Gold Holds Near $2,900 as Traders Assess Powell Speech
Gold held steady just below a record high as the U.S. central bank signaled it was in no hurry to deliver more interest rate cuts, and traders weighed concerns about a global trade war that could help demand for safe-haven assets.
Bullion traded near $2,900 an ounce, after peaking above $2,942 on Tuesday in a volatile session. Federal Reserve Chairman Jerome Powell said officials would be patient before easing monetary policy further. The yield on the benchmark 10-year U.S. Treasury note rose, a drag on bullion since it pays no interest.
Gold has surged higher this year, hitting back-to-back records and potentially testing $3,000 an ounce. The surge has been fueled by rising demand for safe-haven assets as U.S. President Donald Trump has launched a series of aggressive moves on trade, including planned levies on steel and aluminum imports. Traders are trying to get a sense of the potential implications for the U.S. economy and monetary policy if the White House’s stance on trade and immigration reignites inflation and hurts growth.
During his testimony Tuesday, Powell said it would be unwise to speculate on tariff policy. Gold’s rise has been accompanied by inflows into bullion-backed exchange-traded funds. Global holdings have risen for six of the past seven weeks, hitting their highest since November, according to Bloomberg calculations.
Banks have predicted that a $3,000-an-ounce challenge is possible. Among them, Citigroup Inc. said last week it expects gold to reach that level within three months, with geopolitical tensions and trade wars boosting demand.
Source: Bloomberg
Gold Takes a Breather After Record Run on Trade War Fears
Gold prices slipped on Tuesday as investors booked profits following a record high, yet remained bullish amid fears of a global trade war spurred by U.S. President Donald Trump’s new tariffs.
Spot gold fell 0.1% to $2,904.87 per ounce, as of 01:41 p.m. ET (1841 GMT), after hitting a peak of $2,942.70 earlier in the session.
U.S. gold futures settled 0.1% lower at $2,932.60.
“Just seeing some profit-taking from the shorter-term futures traders… the market’s becoming a bit overextended and just due for some downside corrective pressure and some chart consolidation,” said Jim Wyckoff, a senior market analyst at Kitco Metals.
Trump substantially raised tariffs on steel and aluminium imports to a flat 25% “without exceptions or exemptions” in a move he hopes will aid struggling industries in the United States, but which also risks sparking a multi-front trade war.
Traders are keeping an eye on Wednesday’s U.S. inflation data for fresh clues on the interest rate outlook in the world’s largest economy.
A Reuters poll showed the Federal Reserve was expected to wait until the next quarter before cutting rates again. Tariffs could fuel U.S. inflation and postpone rate cuts.
Fed Chair Jerome Powell said the central bank is not in a rush to cut interest rates given an economy that is “strong overall” and inflation that remains above its 2% target.
Powell’s comments were part of his opening remarks prepared for delivery at a Senate Banking Committee hearing.
“Higher-than-expected inflation readings could extend the rate pause by the Fed, which could cause gold’s performance to moderate in the short term,” said Ryan McIntyre, senior portfolio manager at Sprott Asset Management.
Bullion is considered a hedge against inflation, but higher interest rates dampen the non-yielding asset’s appeal.
Given any new proclamations from President Trump, the potential uncertainty could sustain prices, and profit-taking scenarios, like today’s, might be seen by bullish traders as a buying opportunity during a price dip, Wyckoff said.
Among other metals, spot silver fell 0.4% to $31.92 per ounce, platinum eased 0.8% to $986.03 and palladium shed 0.3% to $980.25. PT Rifan Financindo Berjangka.
Source : Reuters