GOLD prices held steady on Wednesday (Jul 31) and headed for a monthly gain, supported by rising optimism surrounding US interest rate cuts, while the focus shifted to the Federal Reserve’s policy verdict due later in the day.
Spot gold held its ground at US$2,407.85 per ounce, as at 0200 GMT, and has gained more than 3 per cent for the month. US gold futures edged 0.1 per cent higher to US$2,405.60.
At the conclusion of the Fed’s two-day meeting later on Wednesday, expectations are that the US central bank will hold rates steady and policymakers will lay the groundwork for a September rate cut.
“The market wants to hear a confirmation that a September cut is on the cards and it will be the beginning of a policy easing cycle. Gold will rally if the Fed language indicates that multiple cuts are coming,” said Kyle Rodda, a financial market analyst at Capital.com.
The US rate futures market has fully priced in a 25-basis-point cut in September. Non-yielding bullion tends to thrive in a low-interest-rate environment.
Traders will also keep an eye on the ADP employment report due later in the day and Friday’s US payrolls report. Data on Tuesday showed that US job openings had dropped 46,000 to 8.184 million by the last day of June.
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On the geopolitical front, the United States carried out a strike in Iraq in self-defence, US officials said, as regional tensions rose after an Israeli airstrike in Beirut that Israel said killed Hezbollah’s most senior commander.
Safe-haven demand for gold will spark if there is a significant escalation in tensions and the war opens up further in the northern border of Israel, Rodda said.
Spot silver rose 0.2 per cent at US$28.44 per ounce.
Platinum gained 0.7 per cent to US$966.13 and palladium edged 1 per cent higher at US$898.13. Both the metals are headed for monthly decline. REUTERS
