Gold Prices Dip but Remain Above $2,100 as Rate Cut Expectations Rise
Gold prices edged lower on Wednesday but held above the $2,100 an ounce level, after rising bets for a June U.S. interest rate cut propelled bullion to a record peak in the previous session, ahead of Federal Reserve Chair Jerome Powell’s testimony.
Fundamentals:
- Spot gold edged down 0.2% at $2,124.46 per ounce, as of 0229 GMT. U.S. gold futures fell 0.4% to $2,132.90.
- Spot prices hit a record peak of $2141.59 per ounce overnight on Tuesday, rallying for a fifth straight session.
- U.S. services industry growth slowed a bit in February amid a decline in employment and new orders for U.S.-manufactured goods dropped more than expected in January.
- Benchmark 10-year U.S. Treasury yields hovered near one-month low levels, making non-yielding bullion more attractive.
- Money market pricing shows traders see a 71% probability that the Fed would begin cutting rates in June, up from 65% on Tuesday morning, according to LSEG’s interest rate probability app.
- Lower rates boost the appeal of non-yielding bullion.
Investor Focus on Powell’s Testimony:
The crypto reader’s attention is currently on Federal Reserve Chair Jerome Powell’s first day of semi-annual testimony before Congress on the state of the U.S. economy. The outcome of his testimony can significantly impact gold prices and market sentiment.
Rise and Retreat of Bitcoin:
The world’s largest cryptocurrency, bitcoin, also experienced a surge to a record high overnight before retreating sharply. This volatility in bitcoin’s price demonstrates the unpredictable nature of the cryptocurrency market.
Weak Economic Indicators:
Data from last week showed that U.S. manufacturing slumped further in February and inflation gradually eased, while consumer sentiment remained weak. These indicators contribute to the growing expectations of a U.S. interest rate cut.
Other Precious Metals:
- Spot platinum fell 0.1% to $879.46 per ounce.
- Palladium edged 0.2% lower to $946.51.
- Silver dropped 0.4% to $23.59.
Hot Take: Gold Prices Remain Steady Amid Rate Cut Speculations
The recent dip in gold prices, while remaining above the $2,100 level, reflects the increased expectations of a June U.S. interest rate cut. Investors are closely watching Federal Reserve Chair Jerome Powell’s testimony for further insights into the state of the U.S. economy and potential monetary policy changes.
By
By
By