Gold prices rose on Friday as investors awaited a speech by Federal Reserve Chairman Jerome Powell that could provide clues on the path to interest rate cuts.
Spot gold rose 0.6% to $2,497.19 per ounce by 10:14 GMT, but remained below a record high of $2,531.60 hit on Tuesday. U.S. gold futures rose 0.6% to $2,532.80.
Prices fell about 1% in the previous session, putting them on track for a weekly loss of 0.3%, as the dollar index and benchmark 10-year U.S. bond yields rose after an unexpected rise in the unemployment rate.
According to the CME Group’s FedWatch tool, traders are 74% likely to see a 25 basis point rate cut in September, while 26% of investors expect a 50 basis point cut. Gold, which pays no interest, rises as interest rates fall.
Traders are awaiting Powell’s remarks, scheduled for 14:00 GMT.
deep concerns
According to a report by the Financial Times, the rush towards gold reflects the deep concerns the world is experiencing, which led to the price of gold rising to an unprecedented level, driven by fears about inflation and instability.
Gold has seen renewed interest among buyers from central banks to Chinese individual investors, who trust gold for financial protection.
Hoarding gold, although not profitable, is a comfort to have around in times of war, crisis, inflation and unrest, says John Reed, market strategist at the World Gold Council.
Central banks, especially in China, Russia, India and Kazakhstan, have been buying gold to reduce their dependence on the US dollar. Chinese investors, worried about the housing crisis and uncertainty, have rushed to buy more gold. The world’s wealthy are also buying more gold, and US hedge funds have followed the market.
The price of gold tends to rise during crises, such as Russia’s invasion of Ukraine in 2022, as investors flee risky assets.
As for other precious metals, silver in spot transactions increased by about 1.4% to $29.39 per ounce, and rose 1.3% during the week.
Platinum rose 0.5% to $948.10, while palladium rose 0.2% to $934.83. Both metals were headed for weekly losses.
