Gold gives up record peak but remains above $2,100 ahead of Powell’s testimony

On Wednesday, gold prices experienced a slight decline but remained above the $2,100 per ounce mark, following a surge driven by increased expectations of a US interest rate cut in June, which pushed the precious metal to a record high in the previous session ahead of Federal Reserve Chairman Jerome Powell’s testimony.

Spot gold prices dipped 0.2 percent to $2,124.46 per ounce, while US gold futures fell 0.4 percent to $2,132.90 per ounce. Despite the slight drop, spot prices had reached a record high of $2,141.59 an ounce the day before, marking the fifth consecutive session of gains.

The slowdown in US services sector growth in February, coupled with a larger-than-expected decline in new orders for US manufactured goods in January, contributed to the sentiment driving gold prices higher. Additionally, with the yield on ten-year US Treasury bonds hovering near one-month lows, the demand for gold as a safe-haven asset increased.

Traders are increasingly pricing in a potential interest rate cut by the US central bank in June, with the likelihood rising from 65 percent to 71 percent, according to LSEG’s interest rate forecast app. Lower interest rates tend to boost the appeal of non-yielding assets like gold.

Investor attention remained on Powell’s testimony before Congress, where he addressed the state of the US economy, which could provide further insights into the Fed’s monetary policy outlook.

In the cryptocurrency market, Bitcoin reached a record high before experiencing a sharp decline.

Other precious metals also saw mixed performance, with platinum slipping 0.1 percent to $879.46 per ounce, palladium dropping 0.2 percent to $946.51 per ounce, and silver falling 0.4 percent to $23.59 per ounce.