Gold consolidates near all-time high on US rate cut hopes

April 4 – Gold prices took a breather on Thursday after hitting an all-time high earlier in the session on expectations for lower US interest rates this year, as investors await more clarity on the timing of the cuts.

Spot gold was steady at USD 2,300.49 per ounce as of 2:50 p.m. EDT (1850 GMT) after hitting a record high of USD 2,304.09 earlier in the day.

US gold futures settled 0.2% lower at USD 2,308.5.

“It’s a continuation of the idea… propagated by the Powell speech the other day that the Federal Reserve is getting set to cut rates,” said Bart Melek, head of commodity strategies at TD Securities.

“That typically is a very accretive thing for gold, particularly since it looks like they (the Fed) are quite prepared to reduce interest rates at a time where inflation is going to be significantly above their 2% target.”

Fed officials including US central bank chief Jerome Powell on Wednesday continued focusing on the need for more debate and data before interest rates are cut, a move financial markets expect to occur in June.

Data showed the number of Americans filing new claims for unemployment benefits increased more than expected last week as labor market conditions gradually eased.

Focus now shifts to US March non-farm payrolls due on Friday which could shed more light on the timing of the Fed’s first rate cut.

Strong central bank buying and safe-haven inflows amid growing geopolitical tensions have boosted demand for gold, helping to drive the price up more than 25% since October.

“It’s heavily overbought and needs to correct to blow some of the froth. Fed cuts are priced in, in my view,” said StoneX analyst Rhona O’Connell.

Elsewhere, spot silver was flat at USD 27.22 per ounce after hitting its highest since June 2021. Platinum rose 0.3% to USD 939.65, and palladium gained 1.6% to USD 1,029.91.

(Reporting by Brijesh Patel in Bengaluru; Editing by Jan Harvey, Ravi Prakash Kumar, and Vijay Kishore)