Gold soars to record peak as US rate-cut bets burnish appeal
Gold prices hit all-time high on anticipation of U.S. interest rate cut in September. Spot gold up 0.5% to $2,479.75 per ounce. $2,500 target in sight with potential for further increase. Fed officials hint at dovish approach. SPDR Gold Trust holdings increase. Other metals show mixed movements.
jumped to an all-time peak on Wednesday, driven by mounting hopes of a U.S. cut in September after recent comments from officials.Spot gold was up 0.5% at $2,479.75 per ounce, as of 0158 GMT, after hitting a of $2,481.09 earlier in the session. U.S. gold futures gained 0.6% to $2,482.00.
"Gold reached a new high watermark as position for the arrival of a lower interest rate environment. The $2,500 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, 's chief market analyst.
"Particularly, if we start seeing some more favourable U.S. CPI prints, which could make the Fed more dovish on rates than is already priced in."
Markets are pricing in a rate cut of at least 25 basis points by the Fed at its September meeting, according to CME's FedWatch Tool. The allure of non-yielding bullion tends to be higher when interest rates are reduced.
Fed Chair Jerome Powell said on Monday recent 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.
Fed Governor Adriana Kugler on Tuesday also expressed cautious optimism that inflation is returning to the U.S. central bank's 2% target.
, the world's largest gold-backed , said its holdings rose 0.66% to 842.02 tonnes on Tuesday from 836.53 tonnes on Monday. [GOL/ETF]
Among other metals, spot silver fell 0.3% to $31.29 per ounce, platinum firmed 0.2% to $1,001.83 and palladium gained 0.4% to $962.69.
