Gold prices strengthened on Thursday, remaining close to a recent peak reached in the prior session as traders increasingly anticipate a series of interest rate cuts by the US Federal Reserve. This expectation has restrained gains in the dollar and Treasury yields.
Spot gold, trading as XAU=, rose by 0.2% to $2,464.13 per ounce as of 1006 GMT, after achieving an all-time high of $2,483.60 on Wednesday. US gold futures also saw a gain of 0.3%, reaching $2,467.30.
According to Lukman Otunuga, senior research analyst at FXTM, “Gold continues to perform strongly amidst growing speculation of imminent US interest rate cuts. Recent dovish remarks from Federal Reserve officials, coupled with a generally weaker dollar and subdued Treasury yields, have bolstered demand for the precious metal.”
Otunuga further suggested that ongoing signs of cooling in the US labor market and additional dovish commentary from Fed officials could sustain this upward momentum, potentially pushing gold to new record highs.
Federal Reserve Governor Christopher Waller and New York Fed President John Williams have both indicated a shift towards more accommodative monetary policy in their recent statements. Richmond Fed President Thomas Barkin also expressed optimism regarding broader declines in inflation.
The attractiveness of gold, which yields no interest, tends to increase in environments of lower interest rates.
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