Gold surges to record highs above $2,160 as Powell touts rate cuts
Investing.com-- Gold prices rose to a record high in Asian trade on Thursday, buoyed chiefly by comments from Federal Reserve Chair Jerome Powell that the central bank will cut interest rates in 2024.
The yellow metal extended a strong rally from last week amid growing optimism over U.S. interest rate cuts, with traders largely holding on to bets that the central bank will begin its rate cutting cycle by as soon as June.
Spot gold jumped more than 0.4% to a record high of $2,161.19 an ounce, while gold futures expiring in April hit a peak of $2,168.10 an ounce.
«The recent rally has been underpinned by a strong surge in investor demand, as the spectre of lower rates has been joined by strong safe haven buying amid elevated geopolitical risks and an uncertain economic backdrop,» ANZ analysts said in a note.
Powell said in an overnight testimony that the Fed did intend to cut interest rates in 2024- a scenario that bodes well for non-yielding assets such as gold.
But Powell still provided scant cues on the timing and scale of the planned cuts, stating that the path of the U.S. economy and inflation was likely to determine any monetary easing.
The Fed Chair also said that the central bank needed more convincing that inflation was moving closer to its 2% annual target.
This notion was furthered later by comments from Minneapolis Fed President Neel Kashkari, who said that he did not see more than two, or even one rate cut this year.
Kashkari cited concerns over sticky inflation- a rhetoric that was presented by several other Fed officials over the past two weeks.
While the dollar fell sharply in overnight trade, it recovered mildly during the Asian session, especially following Kashkari’s comments.
Gold prices were also
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