Gold firms on Middle East tensions; US Fed’s Powell speech in focus
GOLD prices edged higher on Thursday (Oct 19) to hover near a 2½-month high as escalating Middle East turmoil lifted demand for the safe-haven asset, while investors looked forward to US Federal Reserve chair Jerome Powell’s speech due later in the day.
Spot gold was up 0.2 per cent at US$1,950.83 per ounce by 0127 GMT, after hitting its highest since Aug 1 on Tuesday. US gold futures eased 0.3 per cent to US$1,962.90.
A blast on Tuesday at a Gaza hospital killed hundreds of Palestinians just before US President Joe Biden visited Israel as the conflict between the Israeli military and the Hamas militant group raged.
Gold, often used as a safe store of value during times of political and financial uncertainty, has risen nearly US$140 or 8 per cent since falling to a seven-month low on Oct 06.
Market focus will be on Powell’s speech to the Economic Club of New York for more cues on the US interest rate path after recent dovish comments from several Fed officials.
The Fed will keep its key interest rate on hold on Nov 1 and may wait longer than previously thought before cutting it, according to economists in a Reuters poll, as the US central bank’s higher-for-longer message gains traction.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Fed Bank of New York president John Williams said interest rates will need to stay high for a while to get inflation back to the central bank’s 2 per cent target.
Higher rates raise the opportunity cost of holding gold, which is priced in US dollars and does not yield any interest.
US economic activity was little changed over the last month and a half, as labour market tightness continued to ease and prices continued to increase at a modest pace, according to a Federal Reserve report published on Wednesday.
Spot silver was steady at US$22.86, platinum slipped 0.3 per cent to US$883.07 and palladium edged 0.2 per cent lower to US$1,126.86. REUTERS
Share with us your feedback on BT's products and services
