News Digest:

Gold prices stayed firm and got a further boost from Fed Chair Jerome Powell’s statement of a cut in lending rates within a month. A weaker dollar and lower Treasury yields also played their part as gold rose to $2,520 levels with US futures hitting $2,556.

As Powell endorsed an imminent start to rate cuts amidst cooling job markets and inflation, the dollar too fell to its lowest levels in 13 months, making gold cheaper for other currency holders, says a news report which also noted that 10-year US Treasury yields eased.

Market analysts expect gold to remain in vogue with investors for the time that the dollar remains on the back foot ahead of the anticipated rate cuts. In case US yields are low, gold could well move towards $2,550 by the end of August. However, they also noted that traders had fully priced in a rate cut for September with expectations of a 25 basis point reduction.

Takeaway:

The market is also factoring in the uncertainty over the tensions in the Middle East as well as the anticipation over increased demand from India which has ushered in the festival season.

End Notes

Source: https://www.reuters.com/markets/commodities/gold-holds-ground-september-us-rate-cut-expectations-2024-08-26//