Gold prices stabilize as bets on rate cuts decline ahead of Powell's speech

SadaNews Economy - Gold prices stabilized today, as traders scaled back their bets on interest rate cuts ahead of the Federal Reserve symposium in Jackson Hole, following strong data from the U.S. manufacturing sector that heightened monetary policymakers' concerns about inflation.

The precious metal was traded in early Asian dealings near the $3,335 per ounce level, showing little change since the beginning of the week. A manufacturing activity index released Thursday indicated that the sector is expanding at its fastest pace in over three years, supported by strong demand. Financial markets are pricing in the probability of a rate cut next month at about 73%, down from over 90% a week ago.

Awaiting Powell's Speech

Federal Reserve Chair Jerome Powell is scheduled to give a speech on Friday at 10:00 AM New York time as part of the symposium in Wyoming.

Ahead of his anticipated remarks, which will be closely monitored for insights into the monetary policy trajectory, Beth Hammack, President of the Federal Reserve Bank of Cleveland, stated that she would not support a rate cut if the decision were to be made tomorrow.

Other officials who spoke on Wednesday and Thursday adopted a similarly hawkish tone amidst ongoing inflationary pressures.

Gold and U.S. Interest Rate Expectations

Expectations for interest rate cuts, along with geopolitical tensions and central bank purchases, drove gold to a record level in April, while it remains elevated by more than 25% since the start of the year.

Despite remaining within a limited trading range in recent months, market watchers, including UBS Group's Wealth Management division, anticipate further increases.

As of 8:15 AM in Singapore, gold was priced at $3,336.51 per ounce. The Bloomberg Spot Dollar Index eased slightly. Meanwhile, platinum and silver declined, while palladium remained stable.