Gold Hits Two-Week High as Fed Uncertainty Spurs Safe-Haven Demand

Credit: Reuters

Spot gold gained 0.5% to $3,382.19 an ounce at 01:50 p.m. ET (1750 GMT), its highest level since August 11.

U.S. gold futures for December delivery settled 0.5% higher at $3,433.

"Overnight you had the news that Trump fired one of the Fed governors accused of mortgage fraud. It gave a little life to gold because the Fed's kind of been the driver in gold right now," said RJO Futures market strategist Bob Haberkorn.

U.S. President Donald Trump said he was firing Fed Governor Lisa Cook over alleged improprieties in obtaining mortgage loans, an unprecedented step that could test the boundaries of presidential power over the independent monetary policy body should it be challenged in court.

Last week, Federal Reserve Chair Jerome Powell signalled a possible interest rate cut at the U.S. central bank's meeting next month, saying that risks to the job market were rising.

Markets are currently pricing in over 87% probability of a quarter-point rate cut in September, according to the CME FedWatch tool, opens new tab.

"If Powell alludes to a dovish tone on rates at the next meeting and moving forward to another cut for this year, gold should continue higher," Haberkorn added.

Data showed that the U.S. July durable goods orders data showed a decline of 2.8%, compared with a 4% expected decrease and a decline of 9.4% in June. Investors now await the U.S. GDP data on Thursday and the Personal Consumption Expenditures (PCE) on Friday.

Non-yielding gold tends to gain appeal in a low-interest-rate environment and its safe-haven appeal increases during economic uncertainty.

Spot silver inched up 0.1% at $38.52 an ounce.

Platinum fell 0.1% to $1,340.88. Palladium rose 1.5% to $1,102.65 after reaching its lowest level since July 9 earlier in the session.

At Mercury Gold, we offer a wide range of gold bars and coins for sale in Malaysia to suit your investment needs. As a trusted source for physical gold bullion in Malaysia, we also provide secure and convenient options, including gold savings accounts (Mercury Bullion Savings (MBS) program) which starts at just RM50. Discover the best place to buy gold in Malaysia with Mercury Gold, offering competitive prices and expert guidance on where and when is the best time to buy gold in Malaysia. Explore our platform to buy gold Malaysia online, to enjoy an easy and reliable experience. Invest with confidence and let Mercury Gold be your partner in building your investment goal.

Click here to view more.