GOLD prices steadied on Friday (Aug 16) and were headed for a weekly gain on optimism about a US interest rate cut, while traders wait for Federal Reserve chairman Jerome Powell’s speech due next week for cues on the size of the cut.
Spot gold eased 0.2 per cent to US$2,450.91 per ounce, as at 0320 GMT and prices have climbed nearly 1 per cent this week.
US gold futures fell 0.2 per cent to US$2,488.50.
US economic data this week eliminated fears about a recession but traders are convinced the Fed will slash rates on in September.
Markets see a 75 per cent chance of a 25-basis-point cut next month and a 25 per cent chance of a 50 bps reduction, the CME FedWatch tool showed. Traders were evenly split at the start of the week between the two cut options.
“The bullish outlook for gold remains intact given the lower trajectory expected for global interest rates. The precious metal still poised to make a possible run at US$2,500,” said Tim Waterer, chief market analyst, KCM Trade.
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“But in the absence of a pick-up in safe haven demand, it may require the dollar and bond yield to take a step lower for gold to reach the US$2,500 level.”
A low interest rate environment tends to boost non-yielding bullion’s appeal.
Minutes of the Fed’s July policy meeting is due on Wednesday and Powell will speak on the US economic outlook next Friday at the Jackson Hole symposium.
Elsewhere, a new round of Gaza ceasefire talks was underway in Doha, as Palestinian health authorities reported over 40,000 deaths and pressure to end the war intensified.
Spot silver fell 0.8 per cent to US$28.16 per ounce, platinum ticked 0.1 per cent lower to US$951.95 and palladium shed 0.2 per cent to US$942.64. All metals were poised for weekly gains. REUTERS
