Rising Rate Cut Bets Push Gold to Record Price

1 Apr 2024 , 10:18 AM

Monday saw a record high for gold prices as statistics indicated that U.S. inflation decreased in February, increasing expectations of a June interest rate drop by the Federal Reserve.

Spot gold increased 1% to $2,255.39 an ounce. Earlier in the session, the price of an ounce of gold reached a record high of $2,256.09.

The ounce of U.S. gold futures increased 1.7% to $2,275.70.

Due to the dollar’s 0.1% decline versus its competitors, gold became more attractive to holders of other currencies.

According to Federal Reserve Chair Jerome Powell, the most recent U.S. inflation data is “along the lines of what we would like to see.” Powell stated this on Friday.

According to the Bureau of Economic Analysis of the Commerce Department, U.S. prices softened in February, with a 0.3% increase in the personal consumption expenditures (PCE) price index. This information was released on Friday.

As per the CME Group’s FedWatch Tool, traders are factoring in a 69% likelihood that the Federal Reserve will start reducing interest rates in June. Holding bullion has a higher opportunity cost when interest rates are lower.

In March, China’s manufacturing activity increased for the first time in six months, providing policymakers with some respite despite the ongoing impact of a real estate crisis on the country’s morale and economy.

According to health officials on Sunday, 77 Palestinians were killed in Gaza by Israeli attacks in the previous 24 hours.

The largest producer of palladium in the world, Nornickel of Russia, reported on Friday that some European Union customers have refused to purchase goods manufactured with Russian metals.

Spot silver increased by 1% to $25.22 per ounce, while palladium increased by 0.3% to $1018.22 and platinum increased by 0.6% to $913.85.

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