(Bloomberg) — Gold advanced as traders reinforced bets of interest-rate cuts by the Federal Reserve after Treasury Secretary Scott Bessent urged the central bank to lower borrowing costs.
Bessent made his most explicit call yet for the Fed to execute a cycle of interest-rate cuts, suggesting the central bank’s benchmark ought to be at least 1.5 percentage points lower than it is now.
Most Read from Bloomberg
His comments boosted speculation that Fed will reduce rates next month, with some wagers pointing to a jumbo-sized cut. Bullion typically benefits in a lower-rate environment as it pays no interest.
Meanwhile, the Trump administration is considering several private sector candidates for chair of the Fed when the role opens in May, including a strategist at Jefferies LLC and an executive at BlackRock Inc., according to an administration official.
“With stagflation risks and a rate cutting puppet hitting the Fed chair sooner or later, the trajectory is higher” for gold, said Ole Hansen, head of commodity strategy at Saxo Bank A/S.
Traders are still on the lookout for clarification on whether gold bar imports would be subject to tariffs. The US Customs and Border Protection agency stunned the market last week by saying they would be subject to duties, which prompted a spike in the premium for gold futures in New York over the spot price in London. On Monday, President Donald Trump said there would not be a levy but didn’t elaborate.
Futures and spot prices continued to converge after Trump’s latest comments. The December contract on New York’s Comex held near $3,400 an ounce on Wednesday, while spot gold traded near $3,355 an ounce.
Gold has climbed about 28% this year, with the bulk of those gains in the first four months. It has been supported by heightened geopolitical and trade tensions that have spurred haven demand, along with strong central bank purchases.
Spot gold edged 0.2% higher to $3,356.25 an ounce at 4:33 p.m. in New York. The Bloomberg Dollar Spot Index was down 0.2%. Silver and palladium climbed while platinum was little changed.
Copper traded on the London Metal Exchange slipped 0.4% to settle at $9,803 a metric ton. The red metal traded on New York’s Comex fell 0.6% to settle at $4.559 a pound.