Amidst geopolitical uncertainty and prospects of additional rate cuts by the Federal Reserve, safe-haven flows helped gold prices surge to a new record high on Tuesday. Earlier in the day, spot gold reached a new record high of $3,790.82, and by 01:45 p.m. ET (1745 GMT), it had increased 0.8% to $3,777.80 per ounce. December delivery U.S. gold futures ended the day 1.1% higher at $3,815.7. The benchmark 10-year Treasury yields decreased by 0.2%, although the US dollar remained relatively stable.
According to Fed Chair Jerome Powell, the central bank is in a “challenging situation” with persistent threats of higher-than-expected inflation and concerns about the health of the labor market stemming from poor job growth. Regarding the Fed’s potential future interest rate cut, he provided no clarification.
In contrast to the tone set last week, the gold market realized that his speech had nothing noteworthy that would alter the upward trajectory of the metal, according to market strategist Bob Haberkorn of RJO Futures.
Following the Fed’s 25-basis-point interest rate cut earlier this month, traders continue to anticipate additional rate cuts in the United States in October and December. This brings us to Friday’s release of the Fed’s favourite inflation indicator, the U.S. Personal Consumption Expenditures (PCE) index.
NATO denounced Moscow for violating Estonian airspace in “a pattern of increasingly irresponsible behavior” and threatened to deploy “all necessary military and non-military tools” to defend itself simultaneously.
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