LONDON: Gold rebounded nearly two per cent on Wednesday as investors found the metal attractive after prices fell to a three-week low in the previous session, while the Federal Reserve rate cut decision and Chair Jerome Powell’s speech took centre stage.
Spot gold was up 1.9 per cent at US$4,024.56 per ounce, as of 0218 GMT, after dropping to its lowest since October 6 on Tuesday.
US gold futures for December delivery gained 1.4 per cent to US$4,039.50 per ounce.
“Bargain-hunting could be (supporting gold) because it has lost a bit more than 10 per cent of its value, which makes it attractive again because the underlying gold story is still valid,” said Quantitative Commodity Research analyst Peter Fertig.
“There might also be some central bank currency reserve managers who started to have a good opportunity to buy a bit more gold (on the dip),” Fertig added.
US President Donald Trump began the final leg of his Asia trip in South Korea on Wednesday, optimistic about advancing an unresolved tariff deal with President Lee Jae Myung and striking a trade war truce with Chinese President Xi Jinping.
Trump and Xi are set to meet in South Korea on Thursday.
“Progress in US-China trade talks continues to sap demand for haven assets such as gold, which extended a pullback as tension eased … The recent declines may provide an opportunity for central banks to ramp up purchases,” ANZ said in a note.
Meanwhile, the Fed is widely expected to deliver a 25-bp rate cut at its policy meeting on Wednesday, as investors look to any forward-looking commentary from Chair Powell.
Non-yielding gold thrives in a low-interest-rate environment and during times of economic uncertainty.
Gold prices have climbed about 52 per cent year-to-date, reaching an all-time peak of US$4,381.21 on October 20, bolstered by geopolitical and economic uncertainties, rate-cut bets and sustained central bank buying.
Spot silver gained 2.8 per cent to US$48.37 per ounce, platinum was up 1.6 per cent at US$1,611.66 and palladium rose 1.6 per cent to US$1,415.69.
© New Straits Times Press (M) Bhd
