Gold tapers off ahead of Powell's remarks

Economies.com
2024-04-03 08:28AM UTC

Gold prices fell in European trade on Wednesday for the first time in seven days away from recent record highs amid active profit-taking, while investors hold off major positions ahead of the Fed Chair Jerome Powell’s speech about the future of US interest rates.

 

Bearish remarks will boost the odds of a June Fed interest rate cut, in turn sending gold prices towards fresh record highs.

 

Prices 

 

Gold prices fell 0.5% to $2270 an ounce, with a record high at $2288, after gold prices rallied by 1.3% on Tuesday, the sixth profit in a row amid concerns about inflation and geopolitical tensions.

 

The gains are also boosted by somewhat bearish remarks by several Fed officials on the future of US interest rates.

 

Powell 

 

Fed Chair Jerome Powell is speaking at Stanford University later today, expected to reveal new clues on the future of US policies. 

 

Bearish Fed Remarks

 

San Francisco Fed President Mary Dale, and Cleveland Fed President Loretta Mister, both said that the Fed will likely cut interest rates three times this year.

 

US Rates

 

Following their remarks, the odds of a June Fed interest rate cut rallied from 57% to 63%. 

 

Now investors await important US data later today on private sector employment and the services sector in March. 

 

Gold Performance Projections

 

JPMorgan's analysts foresee gold prices hitting $2500 an ounce this year.

 

Goldman Sachs' analysts project a minimum price target of $2300 an ounce for this year, anticipating policy easing by the Federal Reserve.

 

The SPDR

 

Gold holdings at the SPDR Gold Trust rose 2.02 tonnes yesterday to a total of 829 tonnes, away from recent March 13 lows. 

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