By Rahul Paswan
(Reuters) – Gold prices rose slightly on Thursday as expectations of a US Federal Reserve interest rate cut in September grow.
rose 0.3% to $2,466.33 an ounce as of 1448 GMT. On Wednesday, it hit an all-time high of $2,483.60. The US also climbed 0.4% to $2,469.70.
“Analysts foresee long-term gains for the precious metal, driven by the Federal Reserve’s preparations to cut interest rates on the belief that inflation is under control,” said Russell Shor, senior market specialist at Tradu.
Geopolitical instability and central bank demand also provide a positive medium to long-term outlook for gold, Shor said.
According to the CME FedWatch Tool, markets are pricing in a 100% chance of a US rate cut in September. The appeal of unyielding bullion tends to shine especially in a low interest rate environment.
The number of Americans filing new claims for unemployment benefits rose more than expected last week, but there has been no material shift in the labor market, according to data released Thursday by the Labor Department.
However, the International Monetary Fund said on Thursday that the Fed may not cut interest rates until the end of 2024.
Meanwhile, the European Central Bank kept rates unchanged as expected, with President Christine Lagarde saying a move in September was “wide open”.
There is some demand for safe havens from China “due to the negative rhetoric from both US presidential candidates towards China,” said Jim Wyckoff, senior market analyst at Kitco Metals.
Global physically backed exchange-traded gold funds recorded inflows for the second consecutive month in June, according to the World Gold Council. [GOL/ETF]
Spot silver fell 0.5% to $30.15 an ounce, platinum fell about 0.8% to $986.45 and palladium lost 1.6% to $936.25.
