Gold Hits Record High on US Rate Cut Bets

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 Hits Record High on US Rate Cut Bets

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 scaled an all-time high on Wednesday, with recent comments from Federal Reserve officials boosting bets of a US interest rate cut in September.

Spot gold was up 0.1% at $2,470.89 per ounce, as of 0046 GMT, after hitting a record peak of $2,473.18 earlier in the session. US gold futures rose 0.3% to $2,473.70.

Markets are fully pricing in a rate cut of at least 25 basis points by the Fed at its September meeting, according to CME's FedWatch Tool, Reuters reported.

Fed Chair Jerome Powell said on Monday recent inflation readings "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 rate cuts may not be far off.

The International Monetary Fund said on Tuesday that the global economy is set for modest growth over the next two years amid cooling activity in the United States, a bottoming-out in Europe and stronger consumption and exports for China, but risks to the path abound.



Oil Drifts Higher in Sparse Holiday Trade

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Drifts Higher in Sparse Holiday Trade

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices edged up on Monday in thin holiday trade at the end of the year, as traders awaited more Chinese and US economic data later this week to assess growth in the world's two largest oil consumers.

Brent crude futures rose 20 cents to $74.37 a barrel by 1208 GMT. The more active March contract was at $74.00 a barrel, up 21 cents.

US West Texas Intermediate crude gained 27 cents to $70.87 a barrel.

Investors are eyeing China's PMI factory surveys due on Tuesday and the US ISM survey for December to be released on Friday.

Both Brent and WTI rose about 1.4% last week buoyed by a larger-than-expected drawdown from US crude inventories in the week ended Dec. 20 as refiners ramped up activity and the holiday season boosted fuel demand.

Available capacity at US oil refiners is expected to decrease by 108,000 bpd in the week ending Jan. 3, research company IIR Energy said on Monday.

Oil prices were also supported by optimism for Chinese economic growth next year that could lift demand from the top crude oil importing nation.

To revive growth, Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025, Reuters reported last week.

"Global oil consumption reached an all-time high in 2024 despite China underperforming expectations, and oil stockpiles are heading into next year at relatively low levels," said Ryan Fitzmaurice, senior commodity strategist at Marex.

"Going forward, China economic data is expected to improve as the recent stimulus measures take hold in 2025. Also, lower rates in the US and elsewhere should be supportive of oil consumption."

Separately, the World Bank has raised its forecast for China's economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would remain a drag next year.