Gold prices edge higher after Fed’s remarks around rate cuts

(MENAFN) Gold prices edged higher on Tuesday following remarks from Federal Reserve officials, which increased expectations for a more substantial interest rate cut later in the year, according to a report from a UK news agency. Spot gold saw a 0.1 percent rise, reaching USD2,408.77 per ounce by 0354 GMT.

In the previous session, the yellow metal had dropped to its lowest level since July 26 amid a global sell-off sparked by fears of a potential recession in the United States. U.S. gold futures also experienced an uptick, climbing 0.2 percent to USD2,449.50.

Federal Reserve policymakers refuted the notion that the weaker-than-anticipated July jobs data signaled a recessionary collapse. However, they cautioned that the central bank would likely need to implement interest rate cuts to prevent such an outcome. This has led traders to anticipate a 110 basis point reduction in interest rates this year, with more than a 70 percent probability of a 50 basis point cut in September.

Lower interest rates tend to weaken the dollar and bond yields, thereby enhancing the attractiveness of non-yielding gold. In other precious metals, spot silver declined by 0.2 percent to USD27.23 per ounce. Meanwhile, platinum rose by 1.2 percent to USD917.30, and palladium increased by 0.9 percent to USD857.25, recovering from its lowest level since August 2018 recorded on Monday.

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