Gold hits record high as traders bet on US rate cuts, eye Powell’s signal

Investors are closely awaiting Powell’s speech for signals on the central bank’s policy, alongside remarks from other Fed officials this week

Gold prices climbed to a record high on Tuesday (Sep 23), supported by growing expectations of further US rate cuts and a slightly weaker US dollar, with investors awaiting US Federal Reserve chair Jerome Powell’s speech for additional policy insights.

Spot gold was up 0.2 per cent at US$3,752.43 per ounce, as at 9.23 am, after hitting a record high of US$3,758.03 earlier in the session.

US gold futures for December delivery climbed 0.3 per cent to US$3,787.60.

The US dollar index was down 0.1 per cent, making greenback-priced gold cheaper for overseas buyers.

Investors are closely awaiting Powell’s speech, due at 1635 GMT, for signals on the central bank’s policy, alongside remarks from other Fed officials this week.

New Federal Reserve governor Stephen Miran said on Monday that the Fed is misreading how tight it has set monetary policy and will put the job market at risk without aggressive rate cuts, a view countered in remarks by three of his colleagues who feel the central bank needs to remain cautious about inflation.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Last week, the US central bank cut rates by 25 basis points, citing labour market conditions and indicated more cuts would come at its upcoming meetings, but also warned about sticky inflation.

According to the CME FedWatch tool, investors see a 90 per cent probability of a 25-basis-point rate cut in October and a 75 per cent chance of another in December.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.60 per cent to 1,000.57 tonnes on Monday from 994.56 tonnes on Friday.

SEE ALSO

Safe-haven gold, which typically performs well in a low-interest-rate environment, has risen nearly 43 per cent this year, driven by broader geopolitical and economic uncertainty, central bank buying, and monetary policy easing.

Spot silver fell 0.2 per cent to US$43.98 per ounce, hovering near a 14-year high. Platinum gained 0.3 per cent to US$1,420.45 and palladium rose 0.9 per cent to US$1,189.84. REUTERS