Gold price today: Precious metal reaches all-time high on Fed rate cut expectations; silver marginally up

Gold prices surged over 1 per cent to a record high on Tuesday as investors turned to the safe-haven asset following comments from Federal Reserve officials that solidified expectations for a U.S. interest rate cut in September.

By 11:01 a.m. ET (1501 GMT), spot gold increased by 1.3 per cent to $2,452.29 per ounce, while U.S. gold futures for August delivery rose 1.2 per cent to $2,457.20 per ounce.

“Gold prices saw positive movement as interest rate cut expectations increased among buyers, driven by lower inflation data last week. This has influenced the Fed watch tool towards the possibility of rate cuts rather than holding rates longer. Gold prices rose by ₹250 in MCX and $21 in Comex. Price action is expected to continue due to the upcoming retail sales data release later in the evening,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

What's weighing on gold prices?

At an event on Monday, Powell stated that recent inflation data has strengthened policymakers' confidence that price pressures are on a sustainable path to remain low.

San Francisco Federal Reserve Bank President Mary Daly also commented on Monday that "confidence is growing" that inflation is moving toward the U.S. central bank's 2 per cent target, which is the benchmark for considering interest rate cuts.

Lower U.S. interest rates pressure the dollar and bond yields, thereby increasing the attractiveness of non-yielding bullion.

“Gold continues to trade positive, supported by a steady dollar and easing bond yields as focus remains on an early rate cut by the Federal Reserve. The bullion was also supported by a rise in safe-haven demand amid signs of political uncertainty in the U.S. and France, and with a close eye on the geo-political developments in the middle-east as well,” said Pranav Mer, VP - Research (Commodity & Currency) BlinkX and JM Financial.

The benchmark 10-year Treasury yield was near a four-month low. In other metals, spot silver inched up 0.1 per cent to $31.05 per ounce, platinum fell 0.2 per cent to $992.63, and palladium increased 0.8 per cent to $958.