Gold Fluctuates As Traders Digest Fedspeak And Await Powell
Bullion held a 1.7% gain made in the previous session as attention turned to a potential counter-strike that risks starting a full-blown war between Iran and Israel.
(Bloomberg) -- Gold wavered as traders parsed policymaker’s remarks amid bets that the Federal Reserve will be in no rush to cut interest rates.
As investors await Jerome Powell’s speech later Tuesday, bullion climbed as much as 0.4% after earlier slipping as much as 0.9%. Treasury yields gained and the dollar extended its advance into a fifth straight session.
Fed Vice Chair Philip Jefferson said Tuesday that while there has been considerable progress in slowing consumer price gains, the Fed’s task of sustainably restoring 2% inflation is “not yet done.” His San Francisco counterpart Mary Daly reiterated late Monday that there’s no urgency to adjust interest rates, pointing to solid economic growth, a strong labor market and still-elevated inflation.
Traders are betting the Fed will only begin easing in September, after wagering on July a week ago. The repricing comes after a string of surprisingly strong US inflation readings that are shaking up the prevailing narrative for markets and stoking volatility.
The precious metal remains in a weeks-long uptrend as investors seek safety amid growing geopolitical tensions, which helped bullion chalk a 1.7% gain on Monday.
Long-standing supports — including robust buying by central banks and increased demand from Chinese consumers — are also underpinning prices.
The Reserve Bank of India continued its gold purchases in March, according to a post on X from Krishan Gopaul, investment research analyst at the World Gold Council. Year-to-date purchases of nearly 19 tonnes now exceed its 2023 net purchases of 16 tonnes, he added.
Citigroup Inc. raised its 2024 gold estimate to $2,350 an ounce and made a “massive 40% upward revision” to its 2025 forecast to $2,875, it said in a note. That came after Goldman Sachs Group Inc. said Friday the metal was in an “unshakable bull market,” raising its year-end prediction to $2,700.
Spot gold was little changed at $2,383 an ounce as of 11:16 a.m. in New York. The Bloomberg Dollar Spot Index added 0.3%. Silver, platinum and palladium all declined.
--With assistance from Sybilla Gross and Jack Ryan.
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