Gold prices were steady on Wednesday and hovered above key $2,400 level touched earlier this week, supported by safe-haven buying and the prospect of interest rate cuts from the US Federal Reserve later this year.
Fundamentals
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Spot gold held its ground at $2,422.45 per ounce, as of 0106 GMT. Bullion hit a record high of 2,449.89 on Monday.
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US gold futures were steady at $2,426.00.
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Recent data suggested that US inflation resumed its downward trend, but several Fed policymakers remained cautious on cutting rates too soon and ruled out the need for a hike.
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Fed policymakers said the US central bank should wait several more months to ensure that inflation really is back on track to its 2% target before cutting interest rates.
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Bullion is known as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding gold.
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US households continued to feel pinched by inflation in late 2023 even as price pressures ebbed with most Americans saying their financial situation had changed little in the last year.
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The minutes of the Federal Reserve’s last policy meeting, expected at 1800 GMT, could offer more insights into the timing of widely expected interest rate cuts.
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The Shanghai Futures Exchange will raise the trading limit and margin requirements for gold and silver futures contracts from May 23.
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Emboldened by China’s latest measures and pledges to fix the weakest parts of its struggling economy, domestic investors are scooping up shares in a cheap stock market, while most foreign investors are hopeful but taking it slow.
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Elsewhere, Israel urged “nations of the civilised world” to oppose the International Criminal Court prosecutor’s request for arrest warrants against its leaders, and to declare they would ignore the warrants.
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Spot silver rose 0.4% to $32.08 per ounce, platinum was up 0.4% at $1,050.50 and palladium was flat at $1,025.75.
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