Gold rises on Fed rate-cut expectations

Gold alloys

Gold prices rose on Tuesday after Federal Reserve Chair Jerome Powell hinted on July 15 at a possible interest rate cut in September.

Gold futures prices for August delivery rose by 0.19%, or $4.7, to $2,433.60 per ounce at 09:12 am KSA time.

Spot gold rose by 0.39% to $2,431.67 per ounce, silver futures for September delivery increased by 0.30% to $31.03, while the spot price of platinum declined by 0.38% to $995.59 per ounce.

Speaking at the Economic Club in Washington, D.C., Powell said that the central bank will not wait for inflation to decline to its 2% target before lowering interest rates, highlighting the long and variable lags in the effects of monetary policy.

These remarks raised expectations for a 25-basis point rate cut by the Fed next September to 87.6%, compared to 70.2% a week ago. Meanwhile, markets are 91.2% confident that rates will be maintained at the July 31 meeting.