Gold hits record high as traders bet on US rate cuts, eye Powell’s signal

Gold prices climbed to a record high on Tuesday, supported by growing expectations of further US rate cuts and a slightly weaker dollar, with investors awaiting Federal Reserve Chair Jerome Powell’s speech for additional policy insights.

FUNDAMENTALS

* Spot gold was up 0.2% at USD 3,752.43 per ounce, as of 0123 GMT, after hitting a record high of USD 3,758.03 earlier in the session.

* US gold futures for December delivery climbed 0.3% to USD 3,787.60.

* The US dollar index was down 0.1%, making greenback-priced gold cheaper for overseas buyers.

* Investors are closely awaiting Powell’s speech, due at 1635 GMT, for signals on the central bank’s policy, alongside remarks from other Fed officials this week.

* New Federal Reserve Governor Stephen Miran said on Monday that the Fed is misreading how tight it has set monetary policy and will put the job market at risk without aggressive rate cuts, a view countered in remarks by three of his colleagues who feel the central bank needs to remain cautious about inflation.

* Last week, the US central bank cut rates by 25 basis points, citing labour market conditions and indicated more cuts would come at its upcoming meetings, but also warned about sticky inflation.

* According to the CME FedWatch tool, investors see a 90% probability of a 25-basis-point rate cut in October and a 75% chance of another in December.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.60% to 1,000.57 tons on Monday from 994.56 tons on Friday.

* Safe-haven gold, which typically performs well in a low-interest-rate environment has risen nearly 43% this year, driven by broader geopolitical and economic uncertainty, central bank buying, and monetary policy easing.

* Spot silver fell 0.2% to USD 43.98 per ounce, hovering near a 14-year high. Platinum gained 0.3% to USD 1,420.45 and palladium rose 0.9% to USD 1,189.84.

(Reporting by Anmol Choubey in Bengaluru, additional reporting by Ishaan Arora; Editing by Sherry Jacob-Phillips)