Gold prices surge amid anticipation of Fed testimony, inflation data

2024-07-09 03:02:24

(MENAFN) Gold prices saw an uptick on Tuesday following a sharp decline in the previous session, as reported by a UK-based news agency. This increase comes as investors eagerly await the upcoming testimony of US Federal Reserve Chairman Jerome Powell before Congress, as well as the release of inflation data for June. These events are crucial for assessing the potential next steps of the US central bank.

By 0208 GMT, spot gold had risen by 0.1 percent to USD2,361.77 per ounce, recovering slightly after a drop of more than 1 percent on Monday. Similarly, US gold futures climbed by 0.3 percent to reach USD2,369.70. Powell's testimony is scheduled to take place over two days, beginning on Tuesday in the Senate and continuing on Wednesday in the House of Representatives.

Market analysts are closely monitoring these developments, with the CME Group's FedWatch service indicating a 77 percent probability of a rate cut in September, followed by another potential cut in December. Lower interest rates tend to increase demand for non-yielding assets like gold, as they reduce the opportunity cost of holding such investments.

In addition to Powell's testimony, market participants are also focused on the forthcoming consumer price index (CPI) and producer price index (PPI) data for June. These indices, set to be released on Thursday and Friday respectively, will provide further insights into the inflationary trends and economic conditions influencing the Federal Reserve's policy decisions.

The positive movement in gold prices was mirrored by other precious metals. Spot silver edged up by 0.2 percent to USD30.84 per ounce, while platinum saw a more significant rise of 0.9 percent to USD1,005.25 per ounce. Palladium also experienced a modest gain, increasing by 0.1 percent to USD1,009.93 per ounce. These movements highlight the broader interest in precious metals amidst a climate of economic uncertainty and anticipation of significant policy announcements.

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