Gold prices held near a record high after Federal Reserve Chairman Jerome Powell confirmed expectations that the U.S. central bank will start cutting interest rates next month.
Gold was trading near $2,510 an ounce after rising 1.1% on Friday. Powell said in Jackson Hole, Wyoming, on Friday that it was time to shift to monetary easing, and also made clear his intention to prevent a further slowdown in the U.S. labor market. Low interest rates typically boost the appeal of non-yielding gold compared with Treasuries.
The precious metal has risen more than 20% this year in a sharp rally driven in part by optimism that the Federal Reserve is close to shifting toward a long-expected interest rate cut. Prices have also been supported by safe-haven demand due to heightened geopolitical risks and uncertainty ahead of the U.S. election in November, as well as buying by central banks and Asian consumers.
Spot gold was steady at $2,515.12 at 7:40 a.m. in Singapore after hitting a record high of $2,531.75 last week. The Bloomberg Dollar Spot Index was also flat, after falling 1.2 percent last week. Silver was little changed, while platinum and palladium prices fell.
This week is full of data in the United States that could change expectations about how quickly interest rates will be cut. The most notable of these is the personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge — for July, due out on Friday. Investors will also be watching rising tensions in the Middle East, after Israel launched a preemptive strike on Hezbollah targets in southern Lebanon earlier in the week.
