Gold trades near record high

27 Aug 2024 , 10:24 AM

Due to growing wagers on a September interest rate cut by the U.S. Federal Reserve and growing geopolitical concerns in the Middle East, safe-haven demand for gold kept prices stable on Tuesday, staying close to record highs.

Spot gold was unchanged at $2,515.83 an ounce. On August 20, gold reached a record high of $2,531.60.

Gold futures in the US dropped 0.2% to $2,551.20.

Late on Sunday, Israel issued further orders for the evacuation of Deir Al-Balah in the central Gaza Strip, displacing additional people as it stated that its forces would take action against Hamas and other militant organizations present in the region.

Gold has long been recognized for its stability as a preferred hedge against economic and geopolitical threats.

Mary Daly, the president of the San Francisco Federal Reserve, stated on Monday that “the time is upon us” for interest rate reductions, most likely beginning with a quarter-percentage-point drop in borrowing prices.

According to the CME FedWatch tool, traders have fully priced in Fed easing for the upcoming month, with a 70% chance of a 25 basis point decrease and a roughly 30% chance of a larger 50 basis point drop.

The appeal of non-yielding bullion tends to increase in an economy with low interest rates.

A slowdown in business equipment investment into the third quarter was indicated by data released by the Commerce Department on Monday, which revealed an unexpected decline in new orders for important capital goods in the United States in July and a revision of June’s results.

Demand for gold among elite customers Industry officials stated that improvements are anticipated in China and India in the coming months.

Palladium was unchanged at $958.50, platinum dropped 0.3% to $959.24, and spot silver was down 0.2% to $29.85 per ounce.

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