Gold Prices Steady After Record Highs as Rate Cut Bets Fuel Demand

Gold prices stabilized in Asian trading on Wednesday, following a series of record highs earlier in the week. The yellow metal has been buoyed by increasing expectations of lower U.S. interest rates, which have weakened the dollar and driven more investment into gold.

As of 00:51 ET (04:51 GMT), spot gold edged up 0.1% to $2,515.44 per ounce, while December gold futures also rose 0.1% to $2,553.35 per ounce. On Tuesday, spot prices hit an all-time high of $2,531.72 per ounce.

Gold Buoyed by Rate Cut Bets; Powell and Fed Minutes in Focus

Gold’s recent surge has been primarily fueled by growing market speculation that the Federal Reserve will start cutting interest rates as early as September. According to the CME Fedwatch tool, traders are divided between a 25 or 50 basis point reduction.

This week, all eyes are on Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium on Friday. Powell is expected to reinforce the Fed’s dovish outlook, although analysts believe he will stop short of explicitly predicting any rate cuts.

Additionally, the minutes from the Fed’s late-July meeting, set to be released later today, are likely to shed more light on the central bank’s dovish stance. The Fed’s commitment to lower rates is positive news for gold, as it reduces the opportunity cost of holding non-yielding assets like precious metals.

The recent weakness of the dollar has been another key factor driving gains in the metal markets, particularly gold. While other precious metals also saw modest gains, the bulk of investor interest was directed toward gold.

As global markets remain focused on the Fed’s actions, gold continues to be a preferred safe-haven asset, especially in an environment where lower interest rates are anticipated.