Gold holds near record high as investors weigh Powell's remarks

Gold held steady near record high on Wednesday as investors assessed U.S. Federal Reserve Chair Jerome Powell's cautious remarks on potential interest rate cuts and awaited U.S. inflation data due later in the week, while mild profit booking added pressure.

Spot gold held its ground at US$3,765.29 per ounce, as of 0403 GMT. Bullion hit a record high of US$3,790.82 on Tuesday.

U.S. gold futures for December delivery fell 0.5 percent to US$3,798.50.

Powell said on Tuesday the central bank needed to continue balancing the competing risks of high inflation and a weakening job market in coming rate decisions, even as his colleagues staked out arguments on both sides of the policy divide.

Gold is currently being influenced by overbought technical indicators leading to profit-taking and Powell's balanced speech, which lacked clear hints on future rate hikes, OANDA senior market analyst Kelvin Wong said.

"We may see a minor dip in gold prices today. However, both medium-term and short-term trends continue to support a bullish outlook," Wong said.

Gold's relative strength index stood at 78, indicating that the metal was overbought.

The U.S. weekly initial jobless claims report is due on Thursday, followed by the Personal Consumption Expenditures index, the Fed's preferred inflation gauge, on Friday.

"If Friday's data indicates inflation is rising more than policymakers might prefer, possibly due to tariffs, it could exert downward pressure on gold," said Capital.com analyst Kyle Rodda.

Goldman Sachs said in a note dated Tuesday that it expects 25 basis point of cuts in October and December, with a 50 basis point reduction possible if the labor market deteriorates more than anticipated, followed by two cuts in 2026 to a range of 3-3.25 percent.

Meanwhile, NATO warned Russia on Tuesday that it would use "all necessary military and non-military tools" to defend itself, as U.S. President Donald Trump shifted rhetoric by asserting Ukraine could recover all territory occupied by Russia.

Spot silver edged up 0.2 percent at US$44.11 per ounce, platinum rose 0.4 percent to US$1,484.36 and palladium gained 1 percent at US$1,231.85.

REUTERS