Gold Holds Near $2,900 as Traders Assess Powell Speech
Gold held steady just below a record high as the U.S. central bank signaled it was in no hurry to deliver more interest rate cuts, and traders weighed concerns about a global trade war that could help demand for safe-haven assets.
Bullion traded near $2,900 an ounce, after peaking above $2,942 on Tuesday in a volatile session. Federal Reserve Chairman Jerome Powell said officials would be patient before easing monetary policy further. The yield on the benchmark 10-year U.S. Treasury note rose, a drag on bullion since it pays no interest.
Gold has surged higher this year, hitting back-to-back records and potentially testing $3,000 an ounce. The surge has been fueled by rising demand for safe-haven assets as U.S. President Donald Trump has launched a series of aggressive moves on trade, including planned levies on steel and aluminum imports. Traders are trying to get a sense of the potential implications for the U.S. economy and monetary policy if the White House’s stance on trade and immigration reignites inflation and hurts growth.
During his testimony Tuesday, Powell said it would be unwise to speculate on tariff policy. Gold’s rise has been accompanied by inflows into bullion-backed exchange-traded funds. Global holdings have risen for six of the past seven weeks, hitting their highest since November, according to Bloomberg calculations.
Banks have predicted that a $3,000-an-ounce challenge is possible. Among them, Citigroup Inc. said last week it expects gold to reach that level within three months, with geopolitical tensions and trade wars boosting demand.
Source: Bloomberg
