Gold soars to record as US rate-cut bets burnish appeal
Shafaq News/ Gold prices jumped to an all-time peak on Wednesday, drivenby mounting hopes of a U.S. interest rate cut in September after recentcomments from Federal Reserve officials.
Spot gold was up 0.2% at $2,473.87 per ounce, as of 0250 GMT, after hittinga record peak of $2,482.29. U.S. gold futures gained 0.3% to $2,475.80.
"Gold reached a new high watermark as investors position for thearrival of a lower interest rate environment. The $2,500 (range) is the nextimmediate target, though if the current momentum can be sustained we could belooking at prices further north from here before year-end," said TimWaterer, KCM Trade's chief market analyst.
"Particularly, if we start seeing some more favourable U.S. CPIprints, which could make the Fed more dovish on rates than is already pricedin."
Markets are expecting a rate cut of at least 25 basis points by the Fedat September meeting. The allure of non-yielding bullion tends to be higherwhen interest rates are reduced.
Fed Chair Jerome Powell said on Monday recent inflation readings"add somewhat to confidence" that the pace of price increases isreturning to the Fed's target in a sustainable fashion, remarks that suggest aturn to rate cuts may not be far off.
Fed Governor Adriana Kugler on Tuesday also expressed cautious optimismthat inflation is returning to the U.S. central bank's 2% target.
"If (gold) prices retrace, $2,450 near its previous record highseems like a tempting level for bulls to reload for its next leg higher,"City Index senior analyst Matt Simpson said.
Top consumer China still has plenty of appetite for official goldpurchases despite pausing in May and June, as its bullion holdings remain lowas a share of reserves and geopolitical tensions persist, according to a policyinsider, industry experts and data.
Spot silver fell 0.5% to $31.22 per ounce, platinum firmed 0.2% to$1,001.97 and palladium added 1.3% to $971.57.
(Reuters)
