Gold Price News: Gold Holds Steady Above $2,510 An Ounce

Gold prices broadly held steady on Tuesday, although the market perked up later in the day to notch up a modest day-on-day gain.

Prices rose as high as $2,525 an ounce on Tuesday, compared with around $2,518 an ounce in late trades on Monday. However, prices had spent most of the day trading a few dollars either side of $2,512 an ounce.

German consumer confidence figures came out on Tuesday showing the lowest reading since May, and worse than the market had expected, although similar figures for the US economy painted a brighter-than-expected view.

Nevertheless, the markets have for some time been pricing in a first US rate cut next month, and barring any extreme change in fortune, it now looks unlikely that any fresh economic data would be enough to derail that expectation.

Gold has remained supported since late last week when US Fed Chair Jerome Powell gave clear signals that it was time for interest rate cuts in the US, in a speech at the Jackson Hole Symposium – an annual meeting of central bankers – on August 23. Lower interest rates tend to support non-interest-bearing assets like gold and silver.

Powell said there was more evidence that inflation was easing nearer to its 2% target, providing greater confidence that rate cuts would be appropriate. The markets are broadly expecting the US Fed to start cutting rates at its next scheduled meeting on September 18. However, some uncertainty persists over the size of any cut, as well as the sum total of cuts expected before the end of the year.

Gold also continues to take a degree of support from heightened geopolitical tensions. The UN called for calm on Monday after Israel and Lebanon’s Hezbollah movement in recent days staged their biggest round of cross-border military strikes since the war in Gaza began in October 2023.

Looking ahead, the markets will be watching out for Thursday’s Euro Area economic sentiment figures, US Q2 GDP growth, and US weekly initial jobless claims numbers. for the latest readings on the state of the economy.