Gold hits record high as traders bet on US rate cuts, eye Powell's signal

The U.S. dollar index was down 0.1%, making greenback-priced gold cheaper for overseas buyers.

Gold prices steadied on Tuesday after reaching a record high, underpinned by expectations of more U.S. rate cuts and a weaker dollar, as investors awaited Federal Reserve Chair Jerome Powell's speech for further policy cues.

Spot gold held its ground at $3,743.39 per ounce as of 0238 GMT, after hitting a record high of $3,759.02 earlier in the session.

U.S. gold futures for December delivery rose 0.1% to $3,779.50.

The U.S. dollar index was down 0.1%, making greenback-priced gold cheaper for overseas buyers.

"The short-term trend is still bullish intact, but on an intraday basis, we do expect a short-term pullback more due to technical factors," OANDA senior market analyst Kelvin Wong said, adding that the weaker dollar was helping gold at the moment.

"The key support level that we are watching to hold this dip will be around $3,710 and $3,690 level."

Investors are closely awaiting Powell's speech, due at 1635 GMT, for signals on the central bank's policy.

New Federal Reserve Governor Stephen Miran said on Monday that the Fed is misreading how tight it has set monetary policy and will put the job market at risk without aggressive rate cuts, a view countered in remarks by three of his colleagues who feel the central bank needs to remain cautious about inflation.

Last week, the U.S. central bank cut rates by 25 basis points, citing labour market conditions and indicated more cuts would come at its upcoming meetings, but also warned about sticky inflation.

According to the CME FedWatch tool, investors see a 90% probability of a 25-basis-point rate cut in October and a 75% chance of another in December.

"We see slowing economic growth, higher inflation, the shifting geopolitical landscape and a weaker USD keeping gold’s investment demand strong," ANZ said in a note.

"Investment demand will continue to drive silver prices as long as gold shines."

Spot silver fell 0.9% to $43.67 per ounce, hovering near a 14-year high. Platinum was down 0.3% to $1,412.80 and palladium inched lower 0.2% to $1,176.44.