US Rate Cut, Geopolitical Woes Lift Gold to Record High

FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
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US Rate Cut, Geopolitical Woes Lift Gold to Record High

FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa

Gold extended gains to scale a record high on Monday, driven by the momentum generated by the Federal Reserve's interest rate cut and safe-haven demand due to geopolitical risks in the Middle East.
Spot gold was up 0.2% to $2,628.25 per ounce as of 0524 GMT, after hitting a record high of $2,630.93 earlier in the session. Non-yielding gold is up over 27% so far this year, heading for its biggest annual rise since 2010.
US gold futures gained 0.3% to $2,653.00.
"The current state of play in the global economy, which consists of declining interest rates, seemingly ever-present geopolitical risks and an upcoming US election has suited gold to a tee," said Tim Waterer, chief market analyst at KCM Trade.
"If the Fed stays committed to its rate-cutting cycle in the coming months, then any pullback in gold will likely have buyers waiting in the wings, with investors potentially eyeing off some better entry points."
The Fed began its easing cycle last week with a half-percentage point rate cut, and forecast another half-point cut by year-end and a full point next year.
Fed futures traders have priced in 75 basis points in rate cuts by the end of this year, according to CME FedWatch.
Lower rates reduce the opportunity cost of holding bullion, which is also viewed as a safe asset amid economic and political turmoil.
For this week, traders will be looking forward to comments from Fed officials and US PCE inflation data due on Friday, for further policy hints.
Spot silver edged 0.2% lower to $31.05 per ounce, platinum fell 0.4% to $971.05 and palladium shed over 1% to $1,056.55.



Türkiye Receives Waiver for Gas Payments to Russia from Gazprombank Sanctions

A view shows a board with the logo of Gazprombank at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
A view shows a board with the logo of Gazprombank at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
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Türkiye Receives Waiver for Gas Payments to Russia from Gazprombank Sanctions

A view shows a board with the logo of Gazprombank at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
A view shows a board with the logo of Gazprombank at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo

Türkiye has received an exemption for gas payments to Russia after the United States imposed sanctions on Gazprombank, Turkish Energy Minister Alparslan Bayraktar revealed in response to a question from Reuters.

The US imposed new sanctions on Russia's Gazprombank in November, creating an obstacle for buyers of Russian gas, which had been using the bank to make payments. They have since been seeking clarification and exploring other ways to pay.

Türkiye imports almost all its gas requirement and Russia is the top supplier, providing more than 50% of the country's pipeline imports.

Ankara's pipeline gas imports from Russia stood at 21.1 bcm last year.

Türkiye had requested an exemption in discussions with US officials so that it can continue paying for Russian natural gas imports via Gazprombank.

The US on Thursday also granted a waiver to Hungary, which mainly relies on Russian oil and gas.