Gold jumps to record above $2,460 an ounce on hopes Fed will soon cut rates

Gold jumped to a report Tuesday as rising expectations of a September rate of interest reduce bolstered demand for bullion.

Gold futures settled 1.6% increased to an all-time closing excessive of $2,467.8. Gold futures costs have superior greater than 19% this 12 months.

Spot gold jumped 1.9% to $2,468.68 throughout the session. LSEG information exhibits that is an all-time excessive going again to 1968, with out adjusting for inflation.

Gold costs hit report highs earlier this 12 months earlier than pulling again because the prospect of higher-for-longer rates of interest dampened investor enthusiasm for the valuable steel. However curiosity within the asset has grown after June’s softer inflation information and a few not too long ago dovish feedback from Federal Reserve Chair Jerome Powell mixed to lift the chances of charge cuts coming this 12 months. Markets are pricing in 100% odds of a charge reduce in September now, in keeping with futures buying and selling tracked by the CME FedWatch device.

A weakening greenback has additionally supported demand for bullion. On Tuesday, the U.S. dollar rebounded after falling to a five-week low.

“Curiosity to ‘buy-the-dip’ remained prevalent amongst buyers amid sturdy sentiment in direction of gold, which is probably going why the market was fast to rally on tender U.S. information prints and dovish Fed expectations,” UBS’ strategist Joni Teves stated in a word on Friday.

“With the market sitting simply above the psychological $2400 degree, we expect dangers are skewed to the upside,” Teves continued. “We expect positioning stays lean and there is house for buyers to construct gold publicity.”

Gold rallied to report highs within the first half of 2024 on the again of a multi-year spike in demand from central banks all over the world, as mounting world geopolitical dangers boosted curiosity within the secure haven asset. In keeping with UBS, central financial institution shopping for of bullion is the best it has been for the reason that late Nineteen Sixties.

“With some central banks now questioning the protection of holding USD- and EUR-denominated belongings (following the monetary and debt crises and extra not too long ago the struggle in Ukraine), many are selecting to as a substitute fill their reserves with gold,” learn a word final month from UBS.

Gold mining shares additionally superior on Tuesday. The VanEck Gold Miners ETF gained 3.4%, posting a fifth profitable day in six. The U.S.-listed shares of Concord Gold and Gold Fields rose 16.1% and 6.3%, respectively.