BENGALURU- Gold prices jumped to an all-time peak on Wednesday, driven by mounting hopes of a US interest rate cut in September after recent comments from Federal Reserve officials.
Spot gold was up 0.2 percent at $2,473.87 per ounce, after hitting a record peak of $2,482.29. US gold futures gained 0.3 percent to $2,475.80.
“Gold reached a new high watermark as investors position for the arrival of a lower interest rate environment. The $2,500 (range) is the next immediate target, though if the current momentum can be sustained we could be looking at prices further north from here before year-end,” said Tim Waterer, KCM Trade’s chief market analyst.
“Particularly, if we start seeing some more favorable US CPI prints, which could make the Fed more dovish on rates than is already priced in.”
Markets are expecting a rate cut of at least 25 basis points by the Fed at September meeting. The allure of non-yielding bullion tends to be higher when interest rates are reduced.
Fed Chair Jerome Powell said on Monday recent inflation readings “add somewhat to confidence” that the pace of price increases is returning to the Fed’s target in a sustainable fashion, remarks that suggest a turn to rate cuts may not be far off.
