- The precious metal is trading at around $2,330 an ounce after rising 5% in a month.
- Swap traders now price in at most two Fed cuts by the end of the year, the fewest cuts expected since November 2023. Higher interest rates typically hurt gold because it doesn’t yield a return.
- But despite the Fed's expected timetable for rate cuts being pushed back, the precious metal has risen more than 13% this year, amid strong buying by central banks, strong demand from Asian markets, especially China, and rising geopolitical tensions from Ukraine to the Middle East.
- Gold has also found some support in recent days from a weaker US dollar, which fell on Monday after the yen rose on speculation the Japanese government will intervene to support its struggling currency for the first time since 2022.
- Any further action could weigh on the US dollar, making gold more attractive to investors since the metal is priced in that currency.
- Spot gold was little changed at $2,334.96 an ounce, while the Bloomberg Dollar Spot Index was up 0.1%, after falling 0.4% yesterday, while palladium fell, while platinum and silver were steady.
