Gold prices faced a correction in Asian trade on Wednesday after reaching record highs, with traders remaining cautious ahead of Federal Reserve Chair Jerome Powell’s closely-watched testimony. Spot gold fell 0.1% to $2,126.31 an ounce, and gold futures expiring in April declined 0.4% to $2,134.25 an ounce. The previous day, gold had surged to record highs, driven by a combination of safe-haven demand and expectations of a potential reduction in U.S. interest rates in 2024.
Analysts noted that investors, feeling left out of the recent gold rally, turned to the precious metal amid rising concerns about a potential stock market correction. Powell’s two-day testimony was anticipated to provide insights into the Fed’s stance on interest rates.
The outlook for gold remains uncertain as markets await cues from Powell, who is expected to maintain a hawkish stance, limiting the upside for gold. Other precious metals showed mixed performance, with platinum futures rising 0.5% to $89.60 an ounce, while silver futures fell 0.5% to $23.858 an ounce. Traders continued to maintain bets that the Fed might cut rates by 25 basis points in June, according to the CME Fedwatch tool. The upcoming nonfarm payrolls data for February also adds to the week’s focus.