GOLD prices climbed to a two-week high on Thursday (Aug 1) as US Federal Reserve chair Jerome Powell opened the door to cutting interest rates as early as September.
Spot gold was steady at US$2,448.38 per ounce, as at 0217 GMT, after hitting its highest level since Jul 18 earlier in the session. Prices were just about US$35 shy of the record high of US$2483.60 scaled on Jul 17.
US gold futures firmed 0.8 per cent to US$2,492.50.
“Gold bulls couldn’t resist the urge to buy more gold after the Fed effectively signalled the beginning of its rate-cut cycle. But gold bugs may want to warrant some caution above US$2,500, given gold’s reluctance to hold on to gains around these levels,” City Index senior analyst Matt Simpson said.
Fed chair Jerome Powell said on Wednesday rates could be cut as soon as September if the US economy follows its expected path, putting the central bank near the end of a more than two-year battle against inflation but square in the middle of the nation’s presidential election campaign.
Zero-yield gold tends to thrive in a low interest rate environment.
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Market focus shifts to Friday’s US payrolls report.
“If the data comes in much hotter than expected, that could dent gold as we head towards the weekend,” Simpson added.
Elsewhere, Hamas leader Ismail Haniyeh was assassinated in the Iranian capital Tehran early on Wednesday morning, an attack that drew threats of revenge on Israel and fuelled further concerns that the conflict in Gaza was turning into a wider Middle East war.
Geopolitics is increasingly more supportive for gold in the medium and long term, said Nicky Shiels, head of metals strategy at MKS PAMP.
Spot silver fell 0.3 per cent to US$28.94 per ounce, platinum lost 0.3 per cent to US$973.65 and palladium was flat at US$925.16. REUTERS
