Investor optimism for imminent US rate cuts and lingering concern about the Middle East crisis puts a floor under losses
27 August 2024 - 07:38
byDaksh Grover
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Bengaluru — Gold prices edged lower on Tuesday following a slight recovery in the dollar, though losses were capped by investor optimism for imminent US rate cuts and lingering concern about the Middle East crisis.
Spot gold was down 0.4% to $2,507.96/oz by 2.38am GMT. Prices have risen more than 21.5% this year, hitting a record high of $2,531.60 on August 20. US gold futures fell 0.5% to $2,543.20.
The dollar index edged higher against its rivals, making gold less attractive for other currency holders.
A September US rate cut had been set in stone, but the debate revolving around its size could prompt a wait-and-see mode as investors look forward to upcoming economic data to anchor their views, said IG market strategist Yeap Jun Rong.
Traders see a 70% chance of a 25 basis point (bp) rate cut and about 30% probability of a bigger 50bp reduction, according to the CME FedWatch tool.
A low interest rate environment tends to boost non-yielding bullion’s appeal.
San Francisco Federal Reserve president Mary Daly said a quarter-percentage point cut in borrowing costs in September was likely.
“We expect the upward trend for gold prices to persist, given its positive performance in past Fed rate-easing cycles, healthy central bank demand and its status as a good hedge against geopolitical and economic risks,” Yeap said.
Residents of Lebanese cities felt only partial relief on Monday that one of the biggest exchanges of fire between armed group Hezbollah and the Israeli military the previous day was over, worn down by the relentless tension of 10 months of conflict.
Among other metals, spot silver edged 0.1% higher to $29.93/oz, platinum fell 0.5% to $957.55 and palladium rose 0.1% to $959.90.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold slips on stronger dollar
Investor optimism for imminent US rate cuts and lingering concern about the Middle East crisis puts a floor under losses
Bengaluru — Gold prices edged lower on Tuesday following a slight recovery in the dollar, though losses were capped by investor optimism for imminent US rate cuts and lingering concern about the Middle East crisis.
Spot gold was down 0.4% to $2,507.96/oz by 2.38am GMT. Prices have risen more than 21.5% this year, hitting a record high of $2,531.60 on August 20. US gold futures fell 0.5% to $2,543.20.
The dollar index edged higher against its rivals, making gold less attractive for other currency holders.
A September US rate cut had been set in stone, but the debate revolving around its size could prompt a wait-and-see mode as investors look forward to upcoming economic data to anchor their views, said IG market strategist Yeap Jun Rong.
Traders see a 70% chance of a 25 basis point (bp) rate cut and about 30% probability of a bigger 50bp reduction, according to the CME FedWatch tool.
A low interest rate environment tends to boost non-yielding bullion’s appeal.
San Francisco Federal Reserve president Mary Daly said a quarter-percentage point cut in borrowing costs in September was likely.
“We expect the upward trend for gold prices to persist, given its positive performance in past Fed rate-easing cycles, healthy central bank demand and its status as a good hedge against geopolitical and economic risks,” Yeap said.
Residents of Lebanese cities felt only partial relief on Monday that one of the biggest exchanges of fire between armed group Hezbollah and the Israeli military the previous day was over, worn down by the relentless tension of 10 months of conflict.
Among other metals, spot silver edged 0.1% higher to $29.93/oz, platinum fell 0.5% to $957.55 and palladium rose 0.1% to $959.90.
Reuters
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