Gold prices steady after Fed policymakers back rate cuts

GOLD prices held their ground on Tuesday (Sep 24), after hitting an all-time high in the previous session, following comments by US Federal Reserve officials that backed additional interest rate cuts in the future.

Spot gold was steady near US$2,625.52 per ounce, as at 0023 GMT. Bullion hit a record high of US$2,635.29 on Monday.

US gold futures edged 0.1 per cent lower to US$2,650.30.

US policymakers’ comments were in focus after the Fed last week began an easing policy with a half-point rate cut.

Federal Reserve Bank of Chicago president Austan Goolsbee said on Monday he expects “many more rate cuts over the next year” as the US central bank seeks a soft landing for the economy, where it controls inflation without crashing the labour market.

Fed futures traders have priced in 75 basis points in rate cuts by the end of this year, according to CME FedWatch.

Zero-yield bullion tends to be a preferred investment in a low interest rate environment and during geopolitical turmoil.

Other Fed speakers on Monday led by Atlanta Fed president Raphael Bostic and Minneapolis Fed president Neel Kashkari justified the central bank’s big rate move last week.

Eurozone business activity sharply contracted this month as the bloc’s dominant services industry flat-lined, while a downturn in manufacturing accelerated, according to an S&P Global survey released on Monday.

On the geopolitical front, Israel’s military said it launched airstrikes against Hezbollah sites in Lebanon on Monday, which Lebanese authorities said had killed 492 people and sent tens of thousands fleeing for safety in the country’s deadliest day in decades.

Traders will be looking forward to a speech by Federal Reserve governor Michelle Bowman due later in the day and PCE inflation data from the United States on Friday.

Spot silver was steady at US$30.66 per ounce, platinum rose 0.4 per cent to US$960.40 and palladium shed 0.6 per cent to US$1,035.25. REUTERS