Gold prices reached record highs on Tuesday, supported by expectations of further U.S. interest rate cuts and a softer dollar, as investors closely watched for signals from Federal Reserve Chair Jerome Powell.
Spot gold traded at $3,743.39 per ounce as of 0238 GMT, after earlier climbing to an all-time peak of $3,759.02. U.S. gold futures for December delivery rose 0.1% to $3,779.50. The U.S. dollar index fell 0.1%, making gold cheaper for overseas buyers and adding to bullish momentum.
“The short-term trend remains bullish, but we may see a minor pullback due to technical factors,” said Kelvin Wong, senior market analyst at OANDA. “Key support levels to watch are $3,710 and $3,690.”
Investors are awaiting Powell’s speech, scheduled for 1635 GMT, for indications of the Federal Reserve’s next moves. The central bank cut rates by 25 basis points last week, citing labor market conditions, and signaled that further cuts could follow. However, it also warned that inflation remains persistent.
New Federal Reserve Governor Stephen Miran warned that the Fed may be misjudging the tightness of monetary policy and could risk the labor market without aggressive rate cuts. His position contrasts with three colleagues who argue for a cautious approach to control inflation.
The CME FedWatch tool shows investors now assign a 90% probability of a 25-basis-point rate cut in October and a 75% chance of another in December, reflecting expectations for easier monetary policy.
Market analysts say slowing growth, persistent inflation, geopolitical tensions, and a weaker dollar are likely to keep gold investment demand strong. “Investment demand will continue to drive silver prices as long as gold shines,” ANZ analysts noted.
Spot silver fell 0.9% to $43.67 per ounce, near a 14-year high. Platinum was down 0.3% at $1,412.80, while palladium slipped 0.2% to $1,176.44, showing modest declines in other precious metals despite gold’s gains.
Traders remain focused on Powell’s remarks, which could set the tone for U.S. monetary policy and influence the direction of precious metals markets in the weeks ahead.
