By Noel John
(Reuters) -Gold prices climbed to a fresh record high on Tuesday, aided by safe haven flows amid geopolitical uncertainty and expectations of further Federal Reserve rate cuts while investors focused on Chair Jerome Powell’s speech later in the day.
Spot gold rose 0.7% to $3,771.94 per ounce as of 10:18 a.m. ET (1011 GMT), after hitting a fresh record high of $3,790.82 earlier in the session.
U.S. gold futures for December delivery rose 0.8% to $3,804.30.
The benchmark 10-year Treasury yields fell 0.2%, while the U.S. dollar was largely steady.
Powell’s comments, scheduled for 12:35 p.m. ET (1635 GMT), will be scrutinized for further cues on the central bank’s policy path. Investors are currently pricing in two 25-basis point cuts, one each in October and December, with a 92% and 77% probability respectively.
“I think Powell is going to reiterate a bit of what he said at the meeting last week. It will offer clues on coming rate cuts here in the United States, which is going to be supportive of gold,” said RJO Futures market strategist Bob Haberkorn.
Attention is also on Friday’s release of the U.S. Personal Consumption Expenditures (PCE) index, the Fed’s preferred measure of inflation.
Meanwhile, NATO warned Russia that it would use “all necessary military and non-military tools” to defend itself as it condemned Moscow for violating Estonian airspace in “a pattern of increasingly irresponsible behaviour”.
Strong buying interest from ETF investors – driven by expectations of rate cuts, concerns around the Fed’s independence and geopolitical developments – are also likely giving gold prices a boost, Commerzbank said on Tuesday.
The People’s Bank of China is leveraging the Shanghai Gold Exchange to encourage central banks from friendly nations to purchase and store bullion within its borders, Bloomberg reported on Tuesday, citing people familiar with the matter.
Spot silver rose 0.4% to $44.24 per ounce, hovering near a 14-year high. Platinum was up 4.1% at $1,475.51 and palladium rose 2.7% to $1,211.25.
(Reporting by Noel John in Bengaluru; Editing by Leroy Leo)
