(Bloomberg) — Gold traded steady near an all-time high as weak US data bolstered the case for deeper interest rate cuts.
Bullion climbed to a record $2,670.57 an ounce earlier on Wednesday, before paring gains. A report on Tuesday showed US consumer confidence this month fell the most in three years.
Swaps traders increased bets for more than three-quarters of a point of easing by the Federal Reserve this year. Lower rates tend to benefit both gold and silver as they don’t offer interest, while a weaker dollar makes the metals cheaper for many buyers.
Gold has surged 29% this year, while silver has risen 34% — with the rallies gaining momentum after the Fed’s half-point cut last week.
Gold has also been supported by strong central bank purchases and heightened geopolitical tensions driving haven demand. A too-close-to-call US presidential election that could be massively consequential for financial markets is now less than six weeks away.
Gold and silver tend to move largely in tandem as both offer similar macro- and currency-hedging properties. Still, the white metal is more exposed to the economic cycle as it’s also an industrial commodity used in clean-energy technologies, including solar panels.
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