Gold prices are on track for their biggest weekly gain since mid-October, boosted by recent comments from Federal Reserve Chairman Jerome Powell that reinforced expectations of a rate cut later this year. Spot gold was steady at $2,157.16 an ounce at around 8:50 a.m. GMT on Friday, not far from a record high of $2,164.09 hit the previous day.
US gold futures were flat at $2,164.40. Spot gold has gained more than $3.5% this week, which could mark its biggest weekly percentage gain since the Israel-Hamas conflict escalated in mid-October. This week could also be the third consecutive weekly gain for the precious metal.
Powell’s statement that the Fed is almost confident enough about falling inflation to start cutting rates is a key driver of this expectation. According to LSEG’s interest rate probability app, the market is pricing in three to four quarter-point rate cuts, with a 75% chance of the first cut coming in June.
As interest rates fall, the appeal of non-yielding bullion like gold typically increases. Another factor contributing to gold’s strong performance is the recent surge in cyclical assets like stocks, as investors look to diversify their risk exposure, Kavalis explained.
The dollar is headed for its biggest weekly decline of the year, which has also helped to push down gold prices for holders of other currencies.
While gold remained in focus, other precious metals posted mixed performances. Spot platinum fell 0.3% to $916.30 an ounce and silver edged down 0.1% to $24.29. Palladium, on the other hand, rose 0.5% to $1,039.17. Despite these variations, all three metals are set to post weekly gains.
Market attention now turns to the important US jobs data, due out at 1:30 PM GMT. The results of this report could influence gold prices and provide further insight into the economic backdrop affecting the precious metals market.
