Gold Prices See Slight Increase as Investors Monitor Federal Reserve Statements

SadaNews - The trading price of gold was below its peak as investors monitored statements from Federal Reserve officials, led by Jerome Powell, alongside escalating geopolitical tensions with Russia.

Gold prices saw a slight increase to around $3,775 per ounce, distancing itself by only about $20 from the record peak it reached on Tuesday, marking the third consecutive day of historical highs. Federal Reserve Chairman Jerome Powell warned that the labor market and inflation face "risks," without showing a clear inclination to lower interest rates again in October, while Governor Michelle Bowman stated that the bank may have to accelerate the pace of monetary easing as labor market momentum declines.

Gold and silver are among the best-performing commodities this year, supported by multiple factors, including the recent interest rate cuts by the Fed and increased demand from central banks. Gold prices rose by 1.2% on Tuesday after Bloomberg reported that China is considering playing a role in guarding foreign sovereign gold reserves.

Gold also bolstered its gains through strong inflows into exchange-traded funds, which reached their highest level in three years last Friday. According to data gathered by Bloomberg, holdings of gold-backed funds have increased every month this year except for May, rising by about 400 tons so far.

On the geopolitical front, U.S. President Donald Trump stated that NATO countries should shoot down Russian planes if they violate their airspace, indicating a more sympathetic stance towards Ukraine regarding its chances of winning the war. During a meeting on the sidelines of the United Nations General Assembly in New York, Trump said, "Yes, I think so," when asked whether allies should confront Moscow's aircraft.

Regarding expectations, markets are awaiting the release of the U.S. Personal Consumption Expenditures Index on Friday, which is the Fed's preferred measure for monitoring core inflation. Estimates suggest that index growth slowed last month, which could bolster expectations for another interest rate cut, thus supporting the non-yielding yellow metal.

Spot gold rose 0.3% to $3,774.83 per ounce at 8:06 AM in London, while the Bloomberg Dollar Spot Index increased by 0.1%. Silver gained after surpassing $44 per ounce earlier in the week, while platinum and palladium prices also rose.

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