Gold clings to record high on growing US rate-cut bets

By Sherin Elizabeth Varghese

(Reuters) – Gold prices firmed on Thursday, hovering near a record peak hit in the previous session as traders ramped up bets of a start to interest-rate cut cycle by the U.S. Federal Reserve, constraining gains in the dollar and Treasury yields.

Spot gold was up 0.2% at $2,464.13 per ounce as of 1006 GMT, having hit an all-time high of $2,483.60 on Wednesday. U.S. gold futures also climbed 0.3% to $2,467.30.

“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 is “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 saw the second consecutive month of inflows in June. [GOL/ETF]

However, “the surge in (gold) price has stifled the physical markets in south and south-east 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.