Gold pauses after record rally as market consolidates ahead of Fed
Gold hit a record high of $2,531.60 on Tuesday
FOMC will issue minutes of July meeting at 1800 GMT
Adds comments in paragraph 10,11 and updates prices as of 1126 GMT
By Sherin Elizabeth Varghese
Aug 21 (Reuters) -Gold prices eased on Wednesday, a day after hitting record highs, as investors awaited U.S. Federal Reserve meeting minutes and Chair Jerome Powell's speech for clues to the central bank's potential rate-cutting path.
Spot gold XAU= was down 0.1% at $2,510.15 per ounce as of 1126 GMT. U.S. gold futures GCcv1 had lost 0.1% to $2,548.50.
The dollar slipping to its lowest this year and lower Treasury yields could not hold gold at its zenith. Prices fell from an all-time peak of $2,531.60 hit on Tuesday but held strongly above the $2,500 per ounce level. USD/US/
"Right now, the main factor for the relative calm in the markets is the wait-and-see stance from many traders, ahead of the Jackson Hole symposium," said Ricardo Evangelista, senior analyst at ActivTrades.
"Jerome Powell is expected to speak on Friday and many hope that his speech will be the launchpad for the Fed’s rate cutting cycle." Evangelista said, adding that the Fed is likely to continue rate cuts into 2025 and expects gold prices to rise toward $3,000.
Investors are also keeping a close eye on the minutes of the Fed's July policy meeting due at 1800 GMT.
Traders have fully priced in a rate cut at the Fed's September meeting, with a 70%chance of a 25 basis points cut, according to the CME FedWatch tool.
Gold is on pace for its best year since 2020, rising by nearly $470, or 22%, in 2024. Geopolitical tensions, uncertainty regarding the U.S. presidential elections, and potential rate cuts are expected to drive the precious metal even higher.
Chinese investor demand amid distrust in local banks, a shift away from Chinese property investments into other asset classes, and expectations of lower interest rates leading to a weaker U.S. dollar is helping gold trade near record highs, said SP Angel analyst John Meyer.
"Prices look vulnerable to a reversal but could spike to $2,550/oz before heading lower again."
Spot silver XAG= was up 0.5% to $29.57 per ounce, platinum XPT= gained 2.4% to $963.85 and palladium XPD= rose 1.4% to $938.55.
Spot gold price in USD per oz https://reut.rs/3SWCN2Y
Gold surpasses $2,500 an ounce https://reut.rs/3STjB68
Reporting by Sherin Elizabeth Varghese in Bengaluru; editing by Jason Neely
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.