Investing.com — Gold Prices Rise to Record Highs
Gold prices rose Tuesday, climbing to new record highs due to dollar weakness as traders increasingly expect the Federal Reserve to cut interest rates in September.
At 08:15 ET (12:15 GMT), spot gold increased by 0.9% to $2,526.43 an ounce, while gold futures climbed 0.9% to $2,564.95 an ounce.
Gold Hits Record Highs on Rate Cut Bets
Spot gold prices have reached new highs as traders believe the Fed will begin cutting rates in September, with CME Fedwatch indicating a 76% chance of a 25 basis point cut and a 24% probability for a 50 basis point reduction. Lower interest rates favor gold, reducing the opportunity cost of investing in non-yielding assets.
An address from Fed Chair Powell on Friday may provide additional insights into the Fed’s plans.
“Gold prices are up 22% this year, driven by geopolitical uncertainties, anticipated Fed rate cuts, and strong demand from central banks,” analysts at ING stated.
Looking ahead, analysts expect gold to remain near record highs with focus on the timing of rate cuts, especially following the Jackson Hole Symposium later this week.
Other precious metals also saw price increases, with platinum futures rising by 0.6% to $968.65 an ounce and silver futures climbing 1.8% to $29.823 an ounce.
Copper Dips as Escondida Strike Averted
Copper prices edged higher on Tuesday, with benchmark copper futures on the London Metal Exchange rising by 0.2% to $9,268.50 a ton. One-month copper futures increased by 0.4% to $4.1980 a pound.
BHP reached an agreement with labor unions at the Escondida mine on Sunday, avoiding a potential strike that could have severely impacted global copper supplies. Escondida represents 5% of global copper supplies, with a significant strike in 2017 leading to soaring copper prices.
Despite avoiding immediate supply disruptions, copper prices suffered losses through August due to concerns over declining demand, particularly from top importer China.
Markets now await further guidance on interest rates from the Federal Reserve, with Chair Jerome Powell set to speak at the Jackson Hole Symposium on Friday.
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