- Bets that the Federal Reserve will start cutting interest rates in June, along with geopolitical risks and China's economic woes, lifted the non-yielding Gold price to a record high on Wednesday.
- Fed Chair Jerome Powell told US lawmakers on Wednesday that if the economy evolves broadly as expected, the central bank can be expected to cut its benchmark interest rates later this year.
- The current market pricing indicates a greater chance, around 70% for a June Fed rate cut, which dragged the yield on the 10-year US government bond to a one-month low on Wednesday.
- Minneapolis Fed President Neel Kashkari said that he had penciled in two rate cuts in 2024 and added that he may reduce the number of cuts amid the incoming stronger macro data.
- The uncertainty about the Fed's rate-cut path, meanwhile, keeps the US Dollar close to its lowest level since early February and should continue to act as a tailwind for the precious metal.
- Three crew members were killed in a Houthi missile strike on a cargo ship off southern Yemen, marking the first fatalities since the Iran-backed group's attacks on vessels in the Red Sea.
- This raises the risk of a further escalation of military actions in the Middle East and supports prospects for an extension of the well-established short-term uptrend for the safe-haven commodity.
- Traders now look to the release of the US Weekly Initial Jobless Claims data and Fed Chair Jerome Powell's second day of testimony for some impetus ahead of the US NFP report on Friday.
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