Gold Continues Testing New Highs as Further Fed Rate Cut Expectations Grow

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(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.

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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.

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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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https://finance.yahoo.com/news/gold-holds-near-record-high-001650060.html