Mumbai, 27 May (Commoditiescontrol): Gold prices edged higher on Monday, though they remained close to a two-week low as investors adjusted their expectations for a U.S. interest rate cut following the Federal Reserve's recent indications of a potential delay in monetary policy easing.
Spot gold increased by 0.2% to $2,338.85 per ounce, recovering slightly from Friday's low of $2,325.19, the lowest since May 9. U.S. gold futures also rose by 0.3%, reaching $2,340.20 per ounce.
Earlier last week, gold reached a record high of $2,449.89 but has since dropped by over $100. The decline followed the release of the minutes from the Federal Reserve’s April 30-May 1 meeting, which suggested that more time is needed to confidently see inflation move towards the 2% target. This has led traders to doubt that the Fed will cut rates more than once in 2024, with current bets indicating a 62% chance of a rate cut by November, according to the CME FedWatch Tool.
Gold, traditionally seen as a hedge against inflation, faces pressure from higher interest rates, which raise the opportunity cost of holding non-yielding assets like bullion.
In other developments, at least five people were killed and several others went missing after an informal gold mine collapsed in northern Kenya, as reported by officials and local media.
Meanwhile, BHP's ambition to expand its copper portfolio might be challenged by Anglo American investors, who are demanding a simpler acquisition offer or additional cash incentives to secure what could be the mining industry's largest deal.
China's industrial firms reported a 4.3% rise in profits over the first four months of the year compared to the same period last year, according to official data.
Among other precious metals, spot silver climbed by 0.8% to $30.59 per ounce. Platinum increased by 1.2% to $1,037.90, while palladium saw a gain of 1.6%, reaching $979.25 per ounce.
(By Commoditiescontrol Bureau: 09820130172)
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