Gold holds near all-time-high levels ahead of Fed testimony
Gold stood tall near previous session's record highs on Wednesday as markets expect Federal Reserve Chair Jerome Powell's testimony later in the day to reveal clues on a potential June rate cut.
Spot gold was steady at $2,126.75 per ounce, as of 1107 GMT after hitting a historic high of $2,141.59 per ounce in the prior session. U.S. gold futures fell 0.3% to $2,135.20.
Bullion has powered to record highs in other major currencies as well.
Increasing expectations of interest rate cuts, which boost the appeal of non-yielding bullion, following weaker U.S. economic data recently, and fears of an imminent correction in stock markets have led to strong demand for alternative asset classes such as bitcoin and gold, said Commerzbank analyst Carsten Fritsch. [MKTS/GLOB]
Along with the bullion, the world's largest cryptocurrency, bitcoin also touched a record high on Tuesday before retreating sharply.
Tuesday's rally pushed spot gold's 14-day relative strength index to 78, much above the 'overbought' levels at 70.
«We think the gold price has run too far in the short term and expect a correction. U.S. labor market data on Friday could put a damper on rate cut hopes,» Fritsch said.
Traders see a 69% chance for a June Fed rate cut.
Investors focus is also on Powell's first day of semi-annual congressional testimony on the state of the U.S. economy amidst an environment of elevated interest rates.
«We expect Powell to suggest that rate cuts may be delayed but likely to start in 2024,» UBS said in a note.
«With a
