As investors concentrated on Chair Jerome Powell’s speech later in the day, gold prices surged to a new record high on Tuesday, helped by safe haven flows amid global uncertainty and prospects of more Federal Reserve rate cuts.
As of 10:18 a.m. ET (1011 GMT), spot gold had risen 0.7% to $3,771.94 an ounce, after a new high of $3,790.82 earlier in the day.
December delivery U.S. gold futures up 0.8% to $3,804.30.
The U.S. currency remained relatively stable, while the benchmark 10-year Treasury rates decreased by 0.2%.
Powell is expected to speak at 12:35 p.m. ET (1635 GMT), and his remarks will be closely watched for more clues about the central bank’s policy direction. With a 92% and 77% chance, respectively, investors are presently pricing in two 25-basis-point cuts, one in October and one in December.
“I believe Powell will restate some of his remarks from last week’s meeting. It will provide hints about upcoming rate reduction in the US, which would help gold,” said Bob Haberkorn, market analyst at RJO Futures.
The publication of the Fed’s favored inflation indicator, the U.S. Personal Consumption Expenditures (PCE) index, on Friday is also of interest.
NATO, meanwhile, denounced Moscow for breaching Estonian airspace in “a pattern of increasingly reckless behavior” and threatened to deploy “all necessary military and non-military instruments” to protect itself.
Commerzbank said on Tuesday that strong purchasing demand from ETF investors is probably driving up gold prices due to geopolitical circumstances, worries about the Fed’s independence, and predictions of rate reduction.
According to sources familiar with the situation, Bloomberg said Tuesday that the sources’s Bank of China is using the Shanghai Gold Exchange to persuade central banks from friendly countries to buy and hold gold within its borders.
At $44.24 an ounce, spot silver increased 0.4% and was close to a 14-year high. Palladium increased 2.7% to $1,211.25, while platinum increased 4.1% to $1,475.51.