Gold prices firmed on Thursday to hover near a record peak hit in the previous session, as traders ramped up bets of an earlier start to interest-rate cuts by the U.S. Federal Reserve, constraining gains in the dollar and Treasury yields.
Spot gold was up 0.3% at $2,464.90 per ounce as of 1155 GMT, having hit an all-time high of $2,483.60 on Wednesday. U.S. gold futures also climbed 0.3% to $2,468.20.
“Gold continues to shine on growing speculation around lower U.S. interest rates this year. Recent dovish comments by Fed officials, complemented with a broadly weaker dollar and subdued Treasury yields have sweetened appetite for the precious metal,” said FXTM senior research analyst Lukman Otunuga. [USD/] [US/]
Further signs of the U.S. labour markets cooling and more dovish remarks by Fed officials could keep this upside momentum alive, opening doors to fresh all-time highs, Otunuga added.
Fed Governor Christopher Waller and New York Fed President John Williams both noted the shortening horizon toward looser monetary policy. Separately, Richmond Fed President Thomas Barkin said he was “very encouraged” on broadening declines in inflation. Lower rates increase the appeal of non-yielding bullion. Gold price will continue to trade higher during the second half of 2024, analysts said in a brief review conducted by LBMA. According to the World Gold Council, global physically backed gold exchange-traded funds recorded their second consecutive month of inflows in June. [GOL/ETF]
However, “the surge in (gold) price has stifled the physical markets in south and southeast Asia, with buying evaporating and some selling coming back. This is not unusual and the buyers will return once they have acclimatised to the new range,” said StoneX analyst Rhona O’Connell in a note.
Over the next six to 12 months, Citi expects gold to rise $2,700-$3,000 per ounce and silver to climb $38 per ounce.
Spot silver rose 0.3% to $30.39 per ounce, platinum firmed 0.2% to $996.22 and palladium lost 0.1% to $950.50.