Gold Awaits Interest Rate Clues, What's Next?
Gold prices rose for the fifth consecutive week, boosted by the Federal Reserve's first interest rate cut of the year. Gold is now just about $20 an ounce away from the record high set last week, after the Fed cut interest rates by 25 basis points. However, prices briefly corrected after Fed Chairman Jerome Powell stated that further interest rate policy would be taken "meeting by meeting," dampening expectations for a quick rate cut.
The market will be watching economic data due in the coming days, including the Personal Consumption Expenditures (PCE) Index, due for release on Friday. The PCE is the Fed's preferred measure of inflation and is expected to show slower growth, which could support the argument for further rate cuts. Powell is also scheduled to deliver a speech on the economic outlook on Tuesday, which could provide further clues.
However, traders are still pricing in the possibility of two more interest rate cuts this year, a key driver of gold's 40% rise this year. Furthermore, demand for gold as a hedge continues to rise, driven by geopolitical tensions, the impact of US President Donald Trump's tariffs on the global economy, and gold purchases by central banks and exchange-traded funds (ETFs).
At 7:36 a.m. Singapore time, the spot gold price rose 0.1% to $3,688.40 per ounce. The Bloomberg Dollar Index also rose 0.1%, while silver and platinum prices were stable, and palladium recorded an increase.
Source: Newsmaker.id
