Gold steady after pushback from Fed officials over interest rate cuts

Bengaluru — Gold prices steadied on Thursday as a pushback from US Federal Reserve officials on market hopes for early interest rate cuts offset safe-haven demand after Israel rejected a ceasefire offer from Hamas amid continuous talks to end the Gaza conflict.

Spot gold held its ground at $2,033.56 an ounce, as of 4.27am GMT. US gold futures edged 0.1% lower to $2,049.00 an ounce.

On one hand, there are enough geopolitical concerns to keep safe-haven buying on the agenda, which is limiting gold′s downside, said Tim Waterer, chief market analyst at KCM Trade, adding, but on the other hand, delays over timings on potential rate-cuts are acting as a cap to gold′s immediate upside potential.

Fed officials want to hold off on cutting interest rates until they have more confidence that inflation is headed down to 2%.

High interest rates increase the opportunity cost of holding bullion.

Bullion′s downside was limited as concerns over the US regional banking sector remained on the table after Moody′s downgraded New York Community Bancorp to junk, citing pressure on its funding and liquidity.

Gold, considered a safe-haven investment, tends to gain during times of political and economical uncertainty. Investors will be watching out for US weekly jobless claims data due at 1.30pm GMT after last week′s monthly non-farm payrolls report came in stronger-than-expected, showing signs of persistent strength in the labour market.

Spot palladium hit a five-year low, losing 0.2% to $893.16 an ounce.

″The demand picture doesn′t look fantastic at the moment, be it as a result of automotive industry changes (EV′s), or the industrial sector woes of countries like Germany and China. Momentum and sentiment are firmly against the palladium price,″ Waterer said.

Spot silver rose 0.2% to $22.24 an ounce and platinum ticked 0.1% up to $880.05.