Gold holds firm near record high as markets eye Fed policy signals

Gold held firm near a record high on Monday as investors awaited US inflation data and a slew of Federal Reserve speakers this week for additional policy cues after the central bank lowered interest rates last week and signaled potential further easing.

FUNDAMENTALS

* Spot gold edged up 0.1% to USD 3,689.08 per ounce by 0044 GMT. Bullion hit a record high of USD 3,707.40 on Wednesday.

* US gold futures for December delivery climbed 0.5% to USD 3,724.50.

* Market focus has shifted to the release of the US core Personal Consumption Expenditure price index, the central bank’s preferred inflation gauge. The data is due on Friday.

* The Fed cut rates by 25 basis points last week, signaling potential future easing while cautioning about persistent inflation.

* At least a dozen Fed officials are scheduled to speak this week, including Chair Jerome Powell on Tuesday, as markets look for further insights into the central bank’s monetary policy outlook.

* New Fed Governor Stephen Miran on Friday defended himself as an independent policymaker after dissenting in favour of steep rate cuts at Wednesday’s policy meeting and adding that he hopes to convince his fellow policymakers to support larger cuts in future meetings.

* Investors are broadly expecting two additional rate cuts this year — 25 bps each in October and December — with probabilities of 93% and 81%, respectively, according to the CME FedWatch tool.

* Bullion has gained more than 40% this year, driven by broader geopolitical and economic uncertainty, central bank buying, and monetary policy easing.

* Safe-haven bullion, which offers no yield, typically performs well in a low-interest-rate environment.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.94% to 994.56 metric tons on Friday from 975.66 tons on Thursday.

* Spot silver rose 0.1% to USD 43.12 per ounce, hovering near a 14-year high. Platinum eased 0.3% to USD 1,399.69 and palladium rose 0.4% to USD 1,154.17.

(Reporting by Anmol Choubey in Bengaluru; Editing by Subhranshu Sahu)