Gold prices rise as the Fed maintains its key interest rate

2 May 2024 , 11:17 AM

Thursday saw a little increase in gold prices following the U.S. Federal Reserve’s anticipated maintenance of its benchmark interest rate and an indication that rate cuts are still a possibility.

Spot gold was up 0.3% at $2,323.66 an ounce, following a session high of more than 1%.

The ounce of U.S. gold futures increased by 1% to $2,333.30.

The Fed maintained its interest rate policy on Wednesday, but it raised concerns about recent weak inflation data, which may delay any rate reductions.

Chair Jerome Powell stated that while he still anticipated a decline in inflation throughout the year, “my confidence in that is lower than it was.”

Following the Fed meeting, traders increased their wagers that the US central bank would implement at least one rate decrease this year, which resulted in a rise in short-term interest-rate futures for the US.

Lower rates make owning non-yielding bullion more alluring.

Investors are now anticipating this Friday’s release of the U.S. nonfarm payrolls data.

While statistics for the previous month were revised higher, the ADP Employment report released on Wednesday revealed that U.S. private payrolls climbed more than anticipated in April.

The number of job opportunities in the United States dropped to a three-year low in March, according to data from the Labour Department, while the number of people quitting their positions also decreased.

Spot silver increased 0.6% to $26.79 an ounce, palladium increased 0.8% to $956.31, while platinum gained over 1% to $958.95.

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