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Picture: 123RF/DARI HAYASHI
Picture: 123RF/DARI HAYASHI

Gold prices were steady and hovered above key $2,400 level on Wednesday, while investors awaited minutes from the US Federal Reserve’s latest policy meeting for fresh signals on the timing of US interest rate cuts.

Spot gold held its ground at $2,415.35/oz as at 3.45am GMT. Bullion hit a record high of $2,449.89/oz on Monday.

US gold futures were down 0.3% at $2,419.00/oz.

One of the “factors supporting gold is fiat currency debasement undertaken by the US and the developed nations due to the rising budget deficits,” said Kelvin Wong, a senior market analyst for Asia Pacific at Oanda.

“There’s a potential that stimulus fiscal policy will play a higher role in stimulating these countries, and if this takes shape, the confidence of the individual country currency will be eroded.”

Minutes of the Fed's May policy meeting are due at 6pm GMT. Traders are currently pricing a 64% chance of a rate cut by September.

Recent data suggested that US inflation resumed its downward trend, but Fed policymakers said on Tuesday the US central bank should wait several more months to ensure that inflation really is back on track to its 2% target before cutting interest rates.

Lower interest rates and geopolitical uncertainty make bullion a favourable investment.

Gold has been solidifying above the $2,400/oz level ahead of a potentially looser interest rate environment later in 2024, but for it to hit record highs, a pullback in the dollar or bond yields, or an increase in safe-haven demand may be required, said Tim Waterer, chief market analyst at KCM Trade.

Spot silver fell 0.8% to $31.71 after hitting an 11-year high on Monday.

“The silver price is more momentum driven and the break out of major resistance level is more of a catch up play given resilient gold prices,” Wong said.

Platinum edged 0.1% higher to $1,047.76/oz and palladium dropped 0.7% to $1,018.85/oz.

Reuters

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