Gold holds ground as Fed signals imminent rate cuts

Gold prices held steady on Monday, supported by a weaker dollar and lower Treasury yields following dovish remarks from US Federal Reserve Chair Jerome Powell, which solidified expectations for a rate cut in September.

As of 0311 GMT, spot gold remained stable at $2,511.04 per ounce, after rising more than one per cent in the previous session. US gold futures were unchanged at $2,546.40.

On Friday, Powell endorsed the imminent start of rate cuts, stating that further cooling in the job market would be unwelcome.

The dollar is near a 13-month low, making gold more affordable for holders of other currencies. Benchmark 10-year yields have also decreased.

Tim Waterer, chief market analyst at KCM Trade, stated that as long as the dollar stays weak before expected rate cuts, gold will be popular with investors. If US yields stay low, gold could reach $2,550 this week after clearing resistance at $2,530.

In other news, Peru’s gold exports to India are expected to surge 36 per cent to a record $3 billion in 2024 due to rising demand from the world’s second-largest consumer, a senior official said on Friday.

On the geopolitical front, Israel launched rockets and drones at Israel on Sunday, prompting Israeli airstrikes on Lebanon, marking a significant clash in 10 months of border conflict.

In the broader precious metals market, spot silver fell 0.4 per cent to $29.70 per ounce, platinum declined 0.5 per cent to $957.88, and palladium lost 0.8 per cent to $954.92.

Attribution: Reuters

Subediting: M. S. Salama