Gold extends record run past $3800 for first time ever

Gold prices rose on Tuesday to a new record high, supported by a weaker US dollar against most major currencies and markets assessing remarks from Federal Reserve Chair Jerome Powell.

In his speech at the Providence Chamber of Commerce in Rhode Island, Powell stated that the US economy faces risks from both rising inflation and a weakening labor market.

Powell added that current interest rates “are appropriate” to address both threats, noting that he does not see an urgent need for aggressive or rapid cuts. He commented: “The rising risks regarding employment have shifted the balance of risks in achieving our objectives. This stance of monetary policy, which I still view as moderately restrictive, leaves us well positioned to respond to any potential economic developments.”

He further explained that asset prices, including US equities, are “quite elevated” by many measures, but dismissed this as a current risk to financial stability.

Meanwhile, the US dollar index fell 0.1% to 97.2 points at 19:33 GMT, after touching a high of 97.4 and a low of 97.2.

On the trading side, spot gold climbed 1% to $3,811.80 an ounce at 19:33 GMT.