By Anjana Anil and Anushree Ashish Mukherjee
(Reuters) – Gold prices rose further on Wednesday after Federal Reserve Chairman Jerome Powell hinted that a rate cut could be on the table as early as September if inflation remains in line with expectations.
rose 1.2% to $2,437.39 per ounce as of 3:21 PM ET (1921 GMT), recording the biggest monthly gain since March, with a gain of more than 4%. The US settled 0.9% higher at $2,473.
Speaking at a news conference after the Fed’s decision to leave rates unchanged, Powell raised investor hopes for a rate cut in September by saying policymakers are increasingly confident that inflation is steadily approaching the 2% target.
“Gold and silver are rising as Chairman Powell’s comments indicate a September rate cut is likely,” said Tai Wong, a New York-based independent metals trader.
“However, he effectively closed the door with a 50 basis point move. It remains to be seen whether gold can reach new all-time highs as the Fed just met recently raised expectations.”
Support for this safe haven was boosted by the threat of an escalation of the Middle East conflict after Hamas leader Ismail Haniyeh was killed early Wednesday in Iran, fueling a region already shaken by the war in Gaza and a deepening conflict in Lebanon.
A Fed rate cut combined with geopolitical risk in the Middle East could push gold prices to $2,700 an ounce, said Bob Haberkorn, senior market strategist at RJO Futures.
The US dollar pared losses slightly after the Federal Reserve’s interest rate decision, while the benchmark fell. [USD/] [US/]
Spot silver rose 1.6% to $28.85 an ounce. Platinum rose 2.1% to $979.05 and palladium rose 4.6% to $928.50. All three metals were on track for monthly declines.
