Gold Drifts Higher as US Rate Cut Optimism Boosts Appeal

A jeweller shows a gold bar at his shop in downtown Kuwait City on May 20, 2024. (Photo by YASSER AL-ZAYYAT / AFP)
A jeweller shows a gold bar at his shop in downtown Kuwait City on May 20, 2024. (Photo by YASSER AL-ZAYYAT / AFP)
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Gold Drifts Higher as US Rate Cut Optimism Boosts Appeal

A jeweller shows a gold bar at his shop in downtown Kuwait City on May 20, 2024. (Photo by YASSER AL-ZAYYAT / AFP)
A jeweller shows a gold bar at his shop in downtown Kuwait City on May 20, 2024. (Photo by YASSER AL-ZAYYAT / AFP)

Gold prices nudged higher on Tuesday as comments from Federal Reserve Chair Jerome Powell bolstered the case for a September rate cut, while investors awaited more US economic data for further monetary policy cues.

Spot gold rose 0.1% to $2,423.89 per ounce by 0140 GMT. On Monday, prices hit their highest level since May 20, when bullion scaled a record peak of $2,449.89.

US gold futures were flat at $2,429.90.

"Powell continued to lay the groundwork for upcoming policy easing. A rate cut in September is now fully priced in by markets, which may keep sentiments in gold prices well-supported in the lead-up," said IG market strategist Yeap Jun Ron, Reuters reported.

Powell said on Monday the three US inflation readings over the second quarter of this year "add somewhat to confidence" that the pace of price increases is returning to the Fed's target in a sustainable fashion, remarks that suggest a turn to interest rate cuts may not be far off.

When interest rates decrease, the allure of non-yielding bullion typically increases.

Investors were awaiting US retail sales data due at 1230 GMT on Tuesday and comments from Fed governors Christopher Waller and Adriana Kugler later this week for further direction.

A subdued retail sales report may underpin gold prices on dovish Fed bets, while a break to a fresh high will mark a continuation of gold's broader upward trend, which may leave the $2,600 level on watch next, Yeap said.

Elsewhere, India's four-week platinum imports from mid-June eclipsed 2023's total as bullion dealers exploited a loophole by registering alloys containing around 90% gold as platinum to avoid higher duties, government and industry officials told Reuters.

Among other metals, spot silver fell 0.9% to $30.72 per ounce and platinum eased 0.4% to $991.40, while palladium rose 0.2% to $951.84.



Saudi-Indian Business Council: Modi’s Visit to Launch Strategic Private Sector Partnership

A photo of Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi in 2019 (SPA)
A photo of Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi in 2019 (SPA)
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Saudi-Indian Business Council: Modi’s Visit to Launch Strategic Private Sector Partnership

A photo of Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi in 2019 (SPA)
A photo of Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi in 2019 (SPA)

Indian Prime Minister Narendra Modi is expected to arrive in Saudi Arabia on Tuesday for an official visit during which he will meet with Crown Prince Mohammed bin Salman to discuss trade, investment, and energy cooperation.

In anticipation of the visit, the Saudi-Indian business community has expressed optimism about strengthening bilateral ties and advancing toward deeper economic integration through the launch of new joint projects that aim to establish a strategic partnership between the two countries’ private sectors.

Abdulaziz Al-Qahtani, Chairman of the Saudi-Indian Business Council, told Asharq Al-Awsat that India is Saudi Arabia’s third-largest trading partner in terms of exports and fourth in terms of imports, underscoring the importance of their economic relationship.

Al-Qahtani noted that trade between the two countries has grown significantly in recent years, with total bilateral trade reaching approximately $157 billion in 2023—a 20% year-on-year increase.

India’s major exports to the Kingdom include chemical products, organic and inorganic materials, pearls, precious stones, metals, copper, and aluminum. In return, Saudi imports from India consist of plant-based and mineral products, pharmaceuticals, apparel, iron goods, machinery, electrical equipment, and vehicles.

Regarding new initiatives and agreements, Al-Qahtani highlighted two private sector agreements signed in February, signaling both nations’ serious commitment to expanding cooperation in trade, investment, and economic development.

He added that the council is currently working on several initiatives, including activating the bilateral investment promotion and protection agreement, implementing the double taxation avoidance treaty, and proposing frameworks for preferential treatment. These steps aim to enable unconventional projects to benefit from advantages available in both countries.

Al-Qahtani also noted the rising presence of Indian companies in the Saudi market, with more than 50 firms currently operating in the Kingdom. Several of these companies have recently opened regional headquarters in Saudi Arabia.

The sectors with the highest Indian activity include construction—with 20 companies in this field—along with health, training, and technology. “We are now set to begin cooperation in the manufacturing sector as well,” Al-Qahtani said.