Due to safe haven flows amid geopolitical unpredictability and prospects of additional rate reduction by the Federal Reserve, gold prices surged to a new record high on Tuesday. As of 01:45 p.m. ET (1745 GMT), spot gold had increased 0.8% to $3,777.80 per ounce, following a new high of $3,790.82 earlier in the day. At $3,815.7, U.S. gold futures for December delivery ended the day 1.1% higher. The U.S. currency remained relatively stable, but the benchmark 10-year Treasury yields decreased by 0.2%.
While poor job growth raises concerns about the health of the labour market, Fed Chair Jerome Powell said the central bank faced a “challenging situation” with persistent risks of faster-than-expected inflation. Regarding when the Fed would next lower interest rates, he provided no clarification.
According to market strategist Bob Haberkorn of RJO Futures, “the gold market realized that his speech had nothing noteworthy in comparison to the tone established last week, nothing noteworthy enough to alter the upward trajectory in gold.”
Following the Fed’s 25-basis-point rate decrease earlier this month, traders continue to anticipate U.S. rate cuts in October and December. The focus now turns to the Fed’s favored inflation indicator, the U.S. Personal Consumption Expenditures (PCE) index, which is released on Friday.
NATO, meanwhile, denounced Moscow for violating Estonian airspace in “a pattern of increasingly irresponsible behaviour” and threatened to deploy “all necessary military and non-military tools” to defend itself.
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