Spot gold advanced 0.5% to $2,292.31 per ounce after touching a record high of $2,294.99 earlier in the session
Gold prices raced to a record high yet again on Wednesday, after Fed Chair Jerome Powell reiterated that recent readings on job gains and higher-than-expected inflation do not materially change the overall picture of economic policy this year.
Spot gold advanced 0.5% to $2,292.31 per ounce as of 1743 GMT after touching a record high of $2,294.99 earlier in the session.
U.S. gold futures settled 1.5% higher at $2,315.
Gold soared to yet another historic high on higher trading volume after Powell stresses that ‘bumps’ in the road do not change the overall rosy picture, according to Tai Wong, a New York-based metals trader.
Powell’s customary cautious approach does not worry gold bulls. I think bulls want to see $2,300 and I think more ‘tourists’ are getting involved in the trade, Wong added.
Powell said that “if the economy evolves broadly as we expect,” he and his Fed colleagues largely agree that a lower policy interest rate will be appropriate “at some point this year.”
Investors still expect a first rate cut at the Federal Reserve’s June 11-12 policy meeting, even as stronger recent economic data has sown investor doubts about that outcome.
Gold, a hedge against inflation and a safe haven during times of economic and geopolitical uncertainty, has jumped more than 11% so far this year, helped by strong central bank buying and safe-haven demand.
The U.S. jobs report for March is due to be released on Friday, with new inflation data coming next week.
A pair of Fed policymakers said on Tuesday they think it would be “reasonable” to trim U.S. interest rates three times in 2024.
The possibility of rate cuts is still there, but the data is still really strong. This is an election year, so I do not think the Fed will want to be held accountable for any kind of market crash, according to Daniel Pavilonis, senior market strategist at RJO Futures.
