Gold Prices About surged in European trade on Wednesday, setting new record highs and nearing the historic $2500 mark. This rise marks the third consecutive gain, buoyed by falling US 10-year treasury yields and increased expectations of US interest rate cuts.
Prices
Gold prices rose by 0.55% today to reach $2482 an ounce, marking a record high with a session-low of $2461. This follows a 1.9% increase on Tuesday, which was the largest single-day gain in 2024 and the second consecutive profit.
US Yields
US 10-year treasury yields dropped by 0.2% on Wednesday
marking their second decline in a row and hitting four-month lows at 4.156%. The fall in yields has bolstered non-yielding assets like gold, driving up prices as investors seek safer investments.
Powell’s Remarks
Fed Chair Jerome Powell’s recent speech in Washington indicated that the latest consumer price data strengthens the belief that inflation is returning to the 2% target sustainably. With three consecutive readings exceeding expectations
the likelihood of a 0.25% rate cut by the Federal Reserve in September has risen to 100%
with a similar likelihood for a cut in November.
SPDR Gold Trust
Gold holdings at the SPDR Gold Trust increased by 5.49 tonnes yesterday
marking the second consecutive increase and the largest since July 2. This brings the total to 842.02 tonnes, a high not seen since February 8.
Conclusion
Gold’s rally to nearly $2500 an ounce underscores the impact of declining US treasury yields and dovish Fed policies on the precious metal’s appeal. As the Federal Reserve hints at potential rate cuts
investors are flocking to gold as a safe haven, driving its prices to historic highs.
FAQs
Why is gold approaching $2500? Gold is approaching $2500 due to falling US treasury yields and increased expectations of US interest rate cuts, making gold a more attractive investment.
How do US treasury yields impact gold prices? Lower US treasury yields reduce the opportunity cost of holding non-yielding assets like gold
making gold more attractive to investors.
What did Fed Chair Jerome Powell say about inflation? Fed Chair Jerome Powell indicated that recent consumer price data suggests inflation is returning to the 2% target sustainably
increasing the likelihood of interest rate cuts.
How much did gold holdings at SPDR Gold Trust increase? Gold holdings at the SPDR Gold Trust increased by 5.49 tonnes, reaching a total of 842.02 tonnes
the highest level since February 8.
What are the implications of a potential US interest rate cut? A potential US interest rate cut could further weaken the dollar and lower treasury yields
boosting the appeal of gold as a safe-haven investment.