As investors await Fed Chair Powell's address, gold prices remain unchanged

8 Nov 2023 , 10:20 AM

Gold prices held steady on Wednesday as investors sought greater clarification on interest rates from the Federal Reserve following the central bank officials’ conflicting remarks. This was partially offset by a rise in U.S. bond yields.

Tuesday saw spot gold touch its lowest level since October 24. The price of the metal was unchanged at $1,968.64 per ounce. US gold futures increased by 0.1% to $1,975.20.

The dollar strengthened versus its peers for a third straight session, increasing the cost of gold for holders of other currencies.

The yield on the benchmark 10-year U.S. Treasury was close to reaching a five-week low that was reached last week.

According to Chicago Fed President Austan Goolsbee, the U.S. central bank has made great strides towards bringing inflation down to its objective of 2%. If these gains continue, focus will shift to determining how long to maintain current interest rates.

In light of the recent wave of strong economic statistics, Minneapolis Fed Bank President Neel Kashkari suggested that additional action may be necessary on the part of the US central bank to reduce inflation to its target of 2%.

On the other hand, Federal Reserve Governor Michelle Bowman reiterated her belief that another increase in short-term rates will probably be necessary.

Investors are now anticipating Fed Chair Jerome Powell’s remarks, which are scheduled for Wednesday and Thursday.

According to the CME FedWatch tool, futures price in a 22% possibility that rate reduction might occur as early as March, but they also hint to a roughly 15% chance of another boost by January.

Spot platinum slid 0.3% to $888.60 while silver lost 0.3% to $22.56 per ounce. Palladium was steady at $1,055.49, hovering near its lowest level since 2018.

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