- Gold prices rose in early global trading on Tuesday, after comments from US Federal Reserve officials reinforced expectations of a deeper interest rate cut later in the year.
- Spot gold rose 0.1% to $2,408.77 an ounce, while US gold futures rose 0.2% to $2,449.50.
- The yellow metal had fallen to its lowest level since July 26 in the previous session, amid a global selling wave driven by fears of a recession in the United States.
- Federal Reserve policymakers dismissed the idea that weaker-than-expected July jobs data meant the economy was in recessionary free fall, but they also warned that the central bank would need to cut interest rates to avoid that outcome.
- Traders now expect the Fed to cut rates by 110 basis points this year, with a +70% forecast for a 50 basis point cut in September.
- Low interest rates put pressure on the dollar and bond yields, while increasing the appeal of non-yielding gold.
- Among other precious metals, spot silver fell 0.2% to $27.23 an ounce, platinum rose 1.2% to $917.30 an ounce, while palladium rose 0.9% to $857.25 an ounce, after hitting its lowest since August 2018 on Monday.
