A weaker dollar and investor demand for safe haven assets due to the increasing Middle East tensions propelled gold prices to new heights of rise on Wednesday, as investors awaited additional U.S. economic data that could provide guidance on policy.
Spot gold hit an all-time high of $2,288.09 earlier in the day, but it only moved 0.2% higher to $2,283.47 per ounce as of 0055 GMT.
The ounce of U.S. gold futures increased by 1% to $2,303.80.
After reaching its highest levels in over five months in the previous session, the U.S. dollar decreased by 0.1%, lowering the price of gold for holders of other currencies.
Although labor market conditions are progressively improving to support expectations that the Federal Reserve would begin reducing interest rates by June, U.S. job vacancies increased little in February.
Despite better recent economic statistics casting doubt on that outcome among investors, two Federal Reserve policymakers said that it would be “reasonable” to decrease U.S. interest rates three times this year.\
Amidst international outrage, Israel’s Prime Minister Benjamin Netanyahu said that the nation accidently killed seven civilians in a Gaza bombing. Meanwhile, the United States and other allies demanded an explanation.
According to Gold Fields, operational difficulties in South Africa as well as unfavorable weather in Australia and Peru are expected to result in a 20% decrease in the group’s first-quarter output.
Analysts noted that the sharp increase in gold is not rekindling interest in platinum jewelry in Asia.
As per the CME Group’s FedWatch Tool, traders are factoring in a 64% likelihood that the Federal Reserve will start reducing interest rates in June. Holding bullion has a lower opportunity cost when interest rates are lower.
Spot silver increased by 0.3% to $26.19 per ounce, while palladium remained steady at $1,003.60 and platinum increased by 0.3% to $921.39.
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