Gold prices drift higher as Fed stands pat on key interest rate

Thursday,   02-May-2024   08:23 AM (IST)

Gold prices edged higher on Thursday after the US Federal Reserve kept its key interest rate steady, as expected, and indicated that it is still leaning towards eventual rate cuts. Spot gold was up 0.3 per cent at US$2,323.66 per ounce, as at 0037 GMT, after climbing more than 1 per cent in the previous session. US gold futures rose 1 per cent to US$2,333.30 per ounce. The Fed held interest rates steady on Wednesday, but put a red flag on recent disappointing inflation readings that could make those rate cuts a while in coming. Chair Jerome Powell said his forecast remained for inflation to fall over the course of the year, but that “my confidence in that is lower than it was”. US short-term interest-rate futures rose after the Fed meeting, as traders added to bets that the US central bank will deliver at least one rate cut this year. Lower rates increase the appeal of holding non-yielding bullion. Investors are now looking forward to the US non-farm payrolls report, which is due on Friday. The ADP Employment report on Wednesday showed that US private payrolls increased more than expected in April while data for the prior month was revised higher. A report from the US Labor Department showed that US job openings fell to a three-year low in March, while the number of people quitting their jobs declined. Spot silver rose 0.6 per cent to US$26.79 per ounce, platinum gained nearly 1 per cent to US$958.95 and palladium advanced 0.8 per cent to US$956.31.