Gold has remained relatively unchanging near its historic peak, as investors eagerly await a forthcoming address from Jerome Powell, head of the Federal Reserve. The speech, which may shed light on the speed at which the bank intends to slash interest rates, is happening later this week.
Bullion, having attained its highest-ever value on Monday, remained near $2,500 an ounce. Mr Powell, speaking at Fed’s yearly Jackson Hole symposium in Wyoming on Friday, is anticipated to corroborate a shift towards reduced borrowing expenses in the subsequent month. However, the market’s primary concern is determining potential changes to rates post this period.
In addition, this week’s focus for investors includes a report on US jobless claims to be released on Thursday which has potential to influence the Federal Bank’s approach towards monetary easing as it strategises to control inflation without suppressing economic development. A reduction in rates generally bodes well for non-interest bearing bullion.
The expensive metal’s value has skyrocketed over 20% this year, partially fuelled by the possibility of the Fed’s shift becoming a reality. The increasing demand for a safe haven caused by escalated geo-political risks and unpredictability tied to the American elections happening in November, has also played a role. The intense buying by Asian customers and central banks is also a contributing factor.
Nevertheless, there have been indicators that the record-breaking success of gold may currently be impacting the demand in China – the planet’s top purchaser of bullion. A report from Tuesday demonstrated a slump in last month’s imports to its lowest since May 2022.
On Monday, spot gold reached a historic peak of $2,509.94 and held steady at $2,503.31 by 1.16 pm Singapore time. The Bloomberg Dollar Spot Index showed a 0.1 percent increase. Interestingly, silver and palladium experienced a downturn, while platinum similarly remained unchanged.