Project includes the establishment of a reinforcement steel cut and bend facility
Gold hit a fresh record on Monday on growing optimism the Federal Reserve will cut interest rates in the new year, with traders shrugging off boss Jerome Powell’s attempts to temper expectations.
However, equity markets struggled to build on a positive lead from Wall Street, with attention now turning to key US jobs figures due at the end of the week.
Gold prices jumped to as high as $2,135 at one point on Monday as traders flocked into bullion in recent weeks on safe-haven buying as the Israel-Hamas war started.
It has been given extra strength as a string of data points to a slowdown in inflation that has led to speculation the Fed can slash rates.
Bets on an easing of monetary policy were ramped up when Powell said on Friday that it was “well into restrictive territory” after more than a year of hikes that have put borrowing costs at a two-decade high.
Stocks have rallied and the dollar has fallen in recent weeks as a string of data has pointed to a softening of the labour market and a slowdown in economic activity, while inflation continues to drop towards the bank’s two per cent target.
Bets on a drop in rates have weighed on the dollar, which has in turn made gold cheaper for international buyers.
Bloomberg reported that traders saw a 60 per cent chance of such a move in March, while they have fully priced one in May.
“Markets are piling in on the rate cut bets,” Kyle Rodda, of Capital.com, said.
“Gold can run higher and will do at the earliest sign of a recession.”
Powell tried to dampen expectations after his remarks last week, warning that it remained “premature” to speculate on when policymakers will begin cutting.
He added the bank was “prepared to tighten (monetary) policy further if it becomes appropriate to do so”.
His comments come after governor Chris Waller suggested a cut could come next year if data allowed it.
Stephen Innes at SPI Asset Management said: “Despite earlier indications from Federal Reserve officials about the possibility of additional policy tightening leading up to the December (policy) meeting, recent remarks from both Jerome Powell and Chris Waller have been widely interpreted as signalling the conclusion of rate hikes and the possibility of future rate cuts.”
Bitcoin broke back above $40,000 for the first time since May last year, helped by hopes that firms including BlackRock will be given US approval to sell the first spot Bitcoin exchange-traded funds.
Bloomberg said a batch of the products are thought to be given the go-ahead by the Securities and Exchange Commission by next month.
Stock markets were mixed, however, with Hong Kong, Tokyo, Shanghai and Taipei in the red, while Sydney, Seoul, Singapore, Manila, Mumbai, Bangkok and Jakarta rose.
In Hong Kong, troubled developer China Evergrande briefly surged more than 13 per cent after a court in the city ruled Monday that it will have until late January to put together a restructuring plan to avoid liquidation, extending a deadline previously set for December.
The firm, which defaulted on a debt repayment in 2021 and has reported more than $300 billion in liabilities, was hit with a winding-up petition and faces liquidation if officials decide its proposal is not sufficient.
The case has dragged on while parties tried to broker a deal out of court.
Judge Linda Chan on Monday adjourned the case until January 29, adding that Evergrande’s lawyers should seek “more direct discussion with relevant authorities to confirm” that the company’s restructuring was “doable”.
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