Gold prices steadied on Tuesday after reaching a record high, underpinned by expectations of more US rate cuts and a weaker dollar as investors awaited Federal Reserve chair Jerome Powell's speech for further policy cues.
Spot gold held its ground at $3,743.39 (R64,950.44) per ounce as of 2.38am GMT, after hitting a record high of $3,759.02 (R65,221.63) earlier in the session.
US gold futures for December delivery rose 0.1% to $3,779.50 (R65,576.97).
The US dollar index was down 0.1%, making greenback-priced gold cheaper for overseas buyers.
“The short-term trend is bullish intact, but on an intraday basis we do expect a short-term pullback more due to technical factors,” Oanda senior market analyst Kelvin Wong said, adding the weaker dollar was helping gold.
“The key support level we are watching to hold the dip will be around $3,710 (R64,371) and $3,690 (R64,024) level.”
Investors are closely awaiting Powell's speech, due at 16.35pm GMT, for signals on the central bank's policy.
New Federal Reserve governor Stephen Miran said on Monday the Fed is misreading how tight it has set monetary policy and will put the job market at risk without aggressive rate cuts, a view countered in remarks by three of his colleagues who feel the central bank needs to remain cautious about inflation.
Last week, the US central bank cut rates by 25 basis points, citing labour market conditions, and indicated more cuts would come at its upcoming meetings, but also warned about sticky inflation.
According to the CME FedWatch tool, investors see a 90% probability of a 25-basis-point rate cut in October and a 75% chance of another in December.
“We see slowing economic growth, higher inflation, the shifting geopolitical landscape and a weaker US dollar keeping gold’s investment demand strong,” ANZ said in a note.
“Investment demand will continue to drive silver prices as long as gold shines.”
Spot silver fell 0.9% to $43.67 (R757.71) per ounce, hovering near a 14-year high. Platinum was down 0.3% to $1,412.80 (R24,513.07) and palladium inched lower 0.2% to $1,176.44 (R20,412.06).
Reuters
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