Mumbai, 22 May (Commoditiescontrol): Gold prices remained steady on Wednesday, hovering above the crucial $2,400 mark reached earlier this week. The stability in gold is attributed to safe-haven buying and anticipations of interest rate cuts by the U.S. Federal Reserve later this year. Spot gold maintained its position at $2,422.45 per ounce, after hitting a record high of $2,449.89 on Monday. Similarly, U.S. gold futures were steady at $2,426.00.
Recent economic data indicates that U.S. inflation is continuing to decline. However, several Federal Reserve policymakers remain cautious about cutting rates prematurely and have dismissed the necessity for further hikes. The consensus among Fed policymakers is that the central bank should wait several more months to ensure inflation is securely on track to meet the 2% target before considering rate cuts.
Gold is traditionally viewed as an inflation hedge, but higher interest rates can increase the opportunity cost of holding non-yielding bullion. Despite easing price pressures, many U.S. households reported that their financial situation had not improved significantly over the past year.
Investors are keenly awaiting the minutes from the Federal Reserve's last policy meeting, scheduled for release at 1800 GMT, which could provide further insights into the timing of the expected interest rate cuts.
In response to recent economic challenges, the Shanghai Futures Exchange announced it would raise the trading limit and margin requirements for gold and silver futures contracts starting May 23. This move is seen as a measure to stabilize the market amid fluctuating economic conditions.
In other precious metals, spot silver edged up by 0.4% to $32.08 per ounce, platinum increased by 0.4% to $1,050.50, while palladium remained flat at $1,025.75.
Meanwhile, geopolitical tensions flared as Israel called on "nations of the civilised world" to oppose the International Criminal Court prosecutor's request for arrest warrants against its leaders, urging a collective dismissal of the warrants.
(By Commoditiescontrol Bureau: 09820130172)
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