Gold Pauses Amid Fed Minutes Anticipation

21 Aug 2024 , 09:40 AM

Gold took a respite on Wednesday after reaching an all-time high the day before on U.S. rate-cut optimism, as investors awaited minutes from the Federal Reserve’s last meeting and Chair Jerome Powell’s speech for clarification on the severity of cuts.

Spot gold remained unchanged at $2,514.79 per ounce, trading below its all-time high of $2,531.60 set on Tuesday.

U.S. gold futures remained unchanged at $2,553.

Geopolitical concerns and uncertainty caused by the forthcoming US presidential elections, as well as potential interest rate reduction, appear to be driving gold prices even higher.

Traders have fully priced in Fed easing at the September meeting, with a 68% chance of a 25 basis point decrease, according to the CME FedWatch tool. Gold, a non-yielding asset, thrives in a low-interest rate environment.

The US dollar fell to a seven-month low, while benchmark 10-year Treasury yields fell, making non-yielding bullion more affordable for holders of foreign currencies.

The market now awaits the minutes of the Fed’s July policy meeting, which will be released later in the day, as well as Powell’s statement on the U.S. economic outlook at the Jackson Hole conference on Friday.

Meanwhile, U.S. Secretary of State Antony Blinken left the Middle East on Tuesday with a deal between Israel and Hamas still pending.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings declined by 0.20% on Tuesday.

Swiss gold exports in July reached their highest level since April, with greater supply to India and Britain offsetting lower shipments to China, according to customs data from the world’s largest bullion refining and transit hub.

Spot silver nudged up 0.1% to $29.45 per ounce, platinum gained 0.5% to $950.80, while palladium advanced 0.2% to $927.65.

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