By Daksh Grover
In the world of investing, gold is currently holding steady near its record high, with investors eagerly awaiting the release of the U.S. Federal Reserve minutes and Chair Jerome Powell's upcoming speech. Gold prices edged 0.2% higher to $2,500.08 per ounce, just below the all-time high of $2,509.65 reached on Friday. Meanwhile, U.S. gold futures rose 0.1% to $2,537.70.
According to IG market strategist Yeap Jun Rong, "Gold prices have been largely steady in the Asian session, seemingly catching a breather as buyers seek to defend its new record high." Rong also noted that the broader upward trend for gold remains intact, potentially leading prices towards the $2,665 level from a technical perspective.
Gold prices have surged more than 20% this year on expectations of Fed rate cuts, strong central bank buying, and safe-haven demand due to tensions in the Middle East. The appeal of non-yielding bullion typically shines in a low interest rate environment. The Fed is anticipated to cut rates by 25 basis points at each of the remaining three meetings in 2024, with most economists in a Multibagger poll downplaying recession concerns.
Traders will be closely monitoring the release of the Fed's July policy meeting minutes on Wednesday and Chair Powell's speech at the Jackson Hole symposium on Friday for further insights. The recent dip in the U.S. dollar to a seven-month low has provided support for dollar-denominated gold.
On Monday, holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, surged to their highest level in seven months at 859 tonnes. In other metal markets, spot silver fell 0.8% to $29.25 per ounce, platinum gained 0.6% to $958.95, and palladium dropped 0.8% to $924.75.
Analysis:
In summary, gold prices are currently near record highs as investors anticipate Fed rate cuts and closely watch Chair Powell's upcoming speech. The surge in gold prices this year can be attributed to various factors, including expectations of lower interest rates, central bank buying, and geopolitical tensions. The upcoming events, such as the release of Fed minutes and Powell's speech, will provide further guidance on the future direction of gold prices. Additionally, the recent weakness in the U.S. dollar has supported gold prices, making it an attractive investment option for investors seeking a safe-haven asset in uncertain times.