Powell Opens Door to Cut; Gold Holds at $3,370
Gold prices held firm as momentum for a US interest rate cut solidified, after Fed Chairman Jerome Powell opened the door to a September rate cut. Gold traded near $3,370 per troy ounce, extending Friday's 1.1% gain when Powell highlighted rising risks in the labor market on the Jackson Hole stage despite lingering inflation concerns.
The 2-year Treasury yield—which is policy-sensitive—fell, while the dollar strength index weakened after the comments, boosting non-yielding, USD-priced gold. Derivatives market participants now rate the probability of a September rate cut above 85%, but the policy direction beyond that remains unclear given that inflation remains above target and employment data shows weakness.
Powell called the economy a "challenging situation" and alluded to uncertainty about whether President Donald Trump's tariffs could reignite inflation more systematically. So far this year, gold has gained more than a quarter, supported by demand for hedging amid geopolitical tensions and central bank buying. However, CFTC data shows hedge funds trimming their bullish positions to a six-week low. This morning in Asia, spot gold traded slightly at around $3,369; silver and platinum were relatively flat, while palladium strengthened slightly. (ayu)
Source: Newsmaker.id
