Gold reaches record highs after Powell Testimony

7 Mar 2024 , 10:57 AM

Spot prices rose for a sixth straight session on Wednesday, reaching a record high of $2,152.09 per ounce overnight.

Powell informed US legislators on Wednesday that further evidence of declining inflation would be necessary to support the likelihood of interest rate decreases in the upcoming months. Powell is scheduled to testify later in the day before the Senate Banking Committee.

Following Powell’s comments, the U.S. dollar index dropped to a one-month low. For holders of foreign currencies, bullion becomes more affordable when the dollar weakens.

Neel Kashkari, a Fed representative, stated in a different media interview that the Fed should only lower interest rates twice this year—possibly even only once.

In December, Fed officials projected, on average, three rate decreases this year, bringing the Fed policy rate down from its current range of 5.25% to 4.75% to a range of 4.5% to 4.75%.

Lower rates increase the allure of bullion that never yields.

According to data released on Wednesday, U.S. private payroll growth in February was marginally lower than anticipated, while earnings for those who kept their jobs grew at the weakest rate in two and a half years, which is consistent with a cooling labor market.

The more thorough and carefully regarded February non-farm payrolls report from the US Labor Department is due on Friday.

Spot palladium increased 0.3% to $1045.09 while spot platinum slipped 0.2% to $905.70 per ounce. For the first time since January 12, palladium surged back above $1,000 during the previous session.  Spot silver fell to $24.06, down 0.4%.

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