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Highlights
- Gold edges up after Fed signals delay in rate cuts
- Rising dollar impacts bullion buyers worldwide
- Traders anticipate July policy shifts amid global uncertainty
After a brief pullback, gold prices bounced back on Thursday, drawing attention from ASX200 market watchers. The recovery came on the heels of comments by US Federal Reserve Chair Jerome Powell, who noted that the central bank is not in a rush to lower interest rates—even as uncertainties around global trade policies linger.
Spot gold rose 0.5% to US$3,382.82 an ounce during morning trade in Singapore, after shedding 2% in the previous session. The rebound suggests investors may be recalibrating expectations around rate cuts and global inflation trajectories.
Powell highlighted the delicate balance the Fed must maintain. On one hand, the ongoing tariff policies from the US administration pose risks to both inflation and growth. On the other, there’s a chance that inflationary effects might be temporary. “The effects on inflation could be short-lived,” Powell noted, although he also acknowledged the potential for longer-term price pressure.
His comments were met with a stronger US dollar, which tends to weigh on gold demand by making the metal more expensive for buyers using other currencies. Yet, despite the currency headwinds, the yellow metal's bounce suggests investors are still keeping a close watch on economic signals.
Meanwhile, rate-sensitive segments of the Australian market, including gold miners and ASX dividend stocks, are navigating a complex environment. The potential for fewer rate cuts may prompt some reassessment of earnings expectations, especially for sectors reliant on global demand and commodity pricing.
Companies such as Evolution Mining (ASX:EVN) and Newcrest Mining (ASX:NCM) remain closely watched as gold dynamics unfold. Both operate in the precious metals space and are integral components of the ASX200, Australia's key equity benchmark.
Market participants are still pricing in at least three rate cuts for the remainder of 2025, with July being eyed as a potential inflection point. However, until more clarity emerges from US fiscal and trade policies, asset classes tied to global interest rate movements, including gold, may continue to exhibit volatility.
As economic uncertainty and central bank caution persist, gold’s renewed strength suggests it remains a focal point for investors balancing inflation concerns with policy speculation.
