Gold continued to rise in Wednesday’s Asian session.
The gold price (XAUUSD) rose beyond $2,500 per troy ounce on Wednesday, aided by rising geopolitical concerns in the Middle East.
The deteriorating situation in the Middle East and the Fed’s dovish stance support the gold price.
US Federal Reserve (Fed) Chair Jerome Powell’s remarks at the Jackson Hole symposium last week signaled that the “time has come” to begin decreasing interest rates, which supports the precious metal by cutting the opportunity cost of keeping non-interest-paying assets.
Traders are looking forward to Wednesday’s lectures by Fed officials Waller and Bostic.
Investors will draw additional cues from the Fed’s Christopher Waller, Raphael Bostic’s lectures on Wednesday provide some signals concerning the US interest rate outlook. The focus will move to the preliminary US Gross Domestic Product (GDP) Annualized for the Second Quarter (Q2) and Personal Consumption Expenditures (PCE) Price Index figures, which will be released on Thursday and Friday, respectively. The better-than-expected results could boost the US dollar (USD) while limiting the upside for the USD-denominated gold price.
Daily MarketMovers: Gold price remained near a record high.
Special forces have mobilized thousands of troops for a large-scale operation in the northern West Bank, expected to last several weeks. According to the report, the army has carried out the largest military operation in the West Bank since 2002, which will continue for several days.
“The idea of falling interest rates is also appealing to investors. According to Bloomberg, gold ETF holdings surged by 15 tonnes last week, reaching their biggest level in six months. Speculative interest is especially intense. The net long position of speculative investors increased to roughly 193,000 contracts in the week ending August 20th, while gold reached an all-time high, its greatest level in nearly four and a half years,” remarked Commerzbank’s commodity strategist Carsten Fritsch.
US Consumer Confidence Index increased to a six-month high of 103.3 in August.
The Conference Board’s US Consumer Confidence Index increased to a six-month high of 103.3 in August, up from an upwardly revised 101.9 in July.
The US Housing Price Index fell by 0.1% month on month in June, falling short of the market estimate of a 0.2% increase, according to the Federal Housing The Federal Agency demonstrated on Tuesday.
According to the CME FedWatch Tool, the rate futures markets have fully priced in a 25 basis point (bps) rate decrease in September, with the potential of a larger rate cut at 34.5%. Traders expect the Fed to ease by 100 basis points this year.