Powell’s remarks push gold to record highs

Gold prices rose to a record high on Thursday, heading for their seventh straight daily gain, driven by US economic data and Federal Reserve Chairman Jerome Powell’s comments about possible interest rate cuts in the coming months if inflation subsides.

Gold continued its record rise, reaching an all-time high of $2161.09 earlier in the session, looking set for its longest streak of daily gains since at least November 2021.

Gold got a boost on Wednesday after Powell signaled that interest rate cuts are likely in the coming months “if the economy evolves broadly as expected,” along with more evidence of falling inflation. Powell will speak again later today.

In prepared remarks to the House Financial Services Committee, the Fed chairman confirmed that he expects to start cutting rates this year, but is not ready to commit to a timeline for that move.

Lower interest rates make the non-yielding yellow metal more attractive. Powell’s comments, coupled with data released the same day suggesting a slowdown in labor market conditions, led to a decline in US Treasury yields and a decline in the dollar, which added to the appeal of gold.

Gold and the dollar now

Gold futures are now up 0.2% to $2162 an ounce. Spot gold is up about 0.33% to $2155 an ounce. On the other hand, the dollar index is down 0.1% to 103.227 points.

Other metals

Spot silver fell 0.4% to $24.08, while platinum fell 0.3% to $904.83 an ounce and palladium fell 1.5% to $1026.80, after rising more than 12% in the previous session.

Bitcoin’s recovery drives these stocks higher

Shares of digital currency companies Marathon Digital Holdings, Cipher Mining, MicroStrategy, Coinbase, and Riot Platforms rose on Wednesday as the price of Bitcoin rebounded after Tuesday’s declines.

The leading cryptocurrency is currently up 2% on Wednesday after falling more than 6% on Tuesday. Bitcoin hit a new all-time high on Tuesday after rising above the $69,000 mark before seeing a sharp correction. As of 11:10 AM Riyadh time on Thursday, Bitcoin is trading against the US dollar near the $66,746.2 level.

This helped push digital currency stocks higher in premarket trading. Marathon’s stock was up 4%, Cipher Mining was up 3.5%, MicroStrategy was up 7.8%, Coinbase was up 4.6%, and Riot was up 4.2%.

In the wake of Bitcoin’s rise, Bernstein analysts said in a recent note that while the gains “can be attributed to ETF inflows, the market won’t stop at Bitcoin.” The firm expects the market recovery to be “broad-based, led by decentralized finance.”

Oil prices hold gains on upbeat Chinese trade data

Oil prices steadied on Thursday, holding on to gains from the previous night after upbeat Chinese trade data and US data showed a smaller-than-expected increase in crude stocks and a large draw in fuel inventories.

Trade data from China, the world’s second-largest economy, points to an improvement in global trade and is a positive signal for policymakers after a prolonged slowdown in the manufacturing sector that has weighed on the economy.

Brent and West Texas Intermediate crude rose about 1% on Wednesday after US crude stocks rose for a sixth straight week.

Federal Reserve Chairman Jerome Powell said continued progress on inflation is “not guaranteed,” although the US central bank still expects to cut its benchmark interest rate this year. The price of a barrel of US crude oil is now $79, while the price of a barrel of Brent crude is $82.67 at 9:30 GMT.

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Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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