Gold Hovers Near Record Peaks Awaiting Federal Signals and Economic Reports
Gold prices stabilized near their all-time highs on Wednesday, amid cautious trading by investors following comments from U.S. Federal Reserve Chairman Jerome Powell, which lacked decisive guidance on the path of interest rates, while attention turns to important economic data at the end of the week.
Gold prices showed relative stability during today's trading, with spot gold rising by 0.1% to $3767.79 an ounce, after touching an all-time high of $3790.82 in the previous session. In contrast, December gold futures fell by 0.4% to $3800.30.
The caution in the market is attributed to comments made by Fed Chairman Jerome Powell on Tuesday, in which he emphasized the need for the central bank to continue "balancing the conflicting risks of high inflation and a weak labor market when making decisions about future interest rates."
Kelvin Wong, senior market analyst at OANDA, told Reuters that gold is currently under pressure. Wong stated, "Gold is currently facing pressure from technical indicators in overbought territory, leading to profit-taking, in addition to Powell's balanced speech that lacked clear signals regarding future interest rate hikes."
However, Wong added optimistically about the medium-term outlook for the shiny yellow metal: "We may see a slight pullback in gold prices today, but medium- and short-term trends still support expectations for further gains."
The CME Group's FedWatch tool shows that investor confidence in interest rate cuts remains strong, with markets expecting two additional rate cuts this year, each by 25 basis points, with a 93% probability for a cut in October and 77% in December.
The market is awaiting the release of the first weekly unemployment claims report tomorrow, Thursday, followed by the personal consumption expenditures index on Friday, which is considered "the Fed's preferred measure for tracking inflation."
The slight downturn reflected on other precious metals, with silver prices in spot trading dropping by 0.7% to $43.72 an ounce, platinum falling by 0.2% to $1475.78, while palladium decreased by 0.1% to $1218.54.
