Gold retreats from near record-high levels as rate-cut bets ease
GOLD prices were listless on Thursday (May 23) after a recent rally lost steam to dip more than 1 per cent in the previous session, as traders started pulling back their expectations of rate cuts by the US Federal Reserve this year.
Spot gold held its ground at US$2,377.48 per ounce, as at 0113 GMT. Bullion hit a record high of 2,449.89 on Monday.
US gold futures were down 0.6 per cent at US$2,378.20.
Federal Reserve officials indicated that it would take longer than previously anticipated to gain greater confidence in inflation moving to 2 per cent, according to the minutes of the US central bank’s Apr 30 to May 1 session.
Recent data suggested that US inflation resumed its downward trend, but several Fed policymakers remained cautious on cutting rates too soon but ruled out the need for a hike.
Traders’ bets signalled growing doubts that the Fed will cut rates more than once in 2024.
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Bullion is known as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding gold.
Goldman Sachs CEO David Solomon said he does not expect the Federal Reserve to cut interest rates this year.
Asian markets could be delicately poised at the open, with growing worries over how soon US and global interest rates will come down offset by a potential boost from artificial intelligence and chip-making giant Nvidia’s earnings late on Wednesday.
Shares of global miner BHP Group fell more than 3 per cent, a day after smaller rival Anglo American rejected its third takeover proposal and agreed to a one-week extension for the deadline to make a binding offer.
Spot silver fell 0.7 per cent to US$30.56 per ounce, platinum was down 0.4 per cent at US$1,031.04 and palladium lost 1.5 per cent at US$985.00. REUTERS
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