Fed Minutes Spark Gold Rally Amid Rate Cut Talk

22 Aug 2024 , 09:37 AM

Gold held near all-time highs on Thursday as minutes from the US Federal Reserve’s latest meeting confirmed predictions of a September interest rate decrease, with traders now looking forward to Chair Jerome Powell’s speech for insights into the rate outlook.

Spot gold remained unchanged at $2,511.80 per ounce as of 0030 GMT, down from a record high of $2,531.60 set on Tuesday.

U.S. gold futures remained unchanged at $2,548.50.

Minutes from the Fed’s July 30-31 meeting revealed that officials were strongly inclined to decrease rates next month.

Traders have fully priced in Fed easing at the September meeting, with a 62% chance of a 25 basis point decrease, according to the CME FedWatch tool. A low interest rate environment tends to make non-yielding bullion more appealing.

The Fed minutes prepare the way for the Jackson Hole Economic Symposium, which begins on Thursday and will feature a speech by Fed Chair Jerome Powell on Friday.

Additionally, the Bureau of Labour Statistics altered payrolls for the April 2023-March 2024 period to show a 0.5% drop in jobs, or 818,000. This was on the higher end of market expectations of up to one million fewer jobs.

The market will now be watching for initial jobless claims data at 1230 GMT.

Spot silver declined 0.2% to $29.56 per ounce, while platinum increased 0.4% to $967.25 and palladium decreased 0.1% to $950.57.

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