London, May 4 (BNA): Gold prices traded near record highs on Thursday, as US yields and the dollar fell after the US Federal Reserve hinted it might pause the cycle of interest rate hikes.
Spot gold rose 0.1% to $2,040.46 an ounce by 0249 GMT. Earlier in the session, prices rose to $2,072.19 an ounce and hovered near an all-time high of $2,072.49 in 2020.
US gold futures rose 0.6% to $2,050.10, Reuters reported.
The Fed raised its benchmark interest rate by 25 basis points, but no longer says it “anticipates” that further rate increases will be needed, only that it will watch incoming data to determine if further hikes “may be appropriate”.
Yeap Jun Rong, a market analyst at the central bank, said gold was helped by “lower yields, a weaker dollar in the wake of the recent Fed meeting and changes in the language of the policy statement providing the conviction that the central bank will likely shift toward a rate stop.” I.G.
The dollar index fell 0.2%, making gold priced in US dollars more accessible to overseas buyers. Benchmark US Treasury yields also fell.
There is some profit-taking currently and is likely to continue in the near term, but the outlook for gold remains bullish, said Brian Lan, managing director at GoldSilver Central, a Singapore-based gold trader.
Federal Reserve Chairman Jerome Powell said the US has a greater chance of avoiding a recession, but would not rule it out, and added, “It is possible we could have what I hope is a mild recession.”
Economic uncertainties and low rates tend to boost demand for zero-yielding assets.
Yip said concerns in the banking space remain unresolved, which will put a dovish stance in the risk environment, leading to continued safe-haven flows to gold in case of further repercussions.
Spot silver prices rose 0.9 percent to $25.82 an ounce, platinum rose 1 percent to $1,060.16, while palladium rose 1.4 percent to $1,443.11.
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