Gold prices reached a new peak on Wednesday, marking the fourth consecutive session of record highs. This surge can be attributed to a combination of factors including escalating tensions in the Middle East, anticipation of interest rate cuts in the U.S., and persistent inflation, all of which have heightened the appeal of gold.
At 10:55 a.m. EDT (1455 GMT), spot gold showed a 0.1% increase, reaching $2,283.07 per ounce, following an earlier peak of $2,288.09. Meanwhile, U.S. gold futures rose by 0.9% to $2,303.50.
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“Gold rises to yet record high above $2,280 per ounce in the overseas futures and ₹69,487 per 10gm on MCX futures. Technically, we have already seen a rally of nearly 10% in the past 5-weeks, now we expect some profit-booking,” said Pranav Mer, VP – Research (Commodity & Currency) BlinkX and JM Financial.
Two Federal Reserve policymakers expressed their belief on Tuesday that it would be “reasonable” to implement three interest rate cuts in the U.S. this year, despite recent robust economic indicators stirring skepticism among investors regarding such a move.
The price of gold, valued as a hedge against inflation and a haven during periods of political and economic uncertainty, has surged over 10% since the beginning of the year. This uptick is attributed to substantial central bank purchases and increased demand for safe-haven assets.
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Recent data reveals a deceleration in the growth of the U.S. services industry in March, alongside a drop in the prices paid by businesses for inputs to a four-year low. This trend suggests a favorable outlook for inflation.
Investors are eagerly awaiting insights from Fed Chair Jerome Powell later today, hoping to glean information on the timing of the central bank’s anticipated initial rate cut.
Back home, gold prices surged by ₹830, reaching a record high of ₹69,200 per 10 grams on Wednesday, driven by a rally in global precious metal rates, according to HDFC Securities.
“Gold prices continued their positive trajectory in MCX, registering gains of over ₹400 in morning trade at 69400. Although some minor profit booking occurred, with prices dipping towards 69150, the overall trend remained strong. This sustained rally, which has seen an increase of over ₹3000 since March 27th when prices were at 66000, is fueled by geopolitical tensions and ongoing US-China trade issues. Additionally, expectations of interest rate cuts being implemented from June 2024 are contributing to the bullish sentiment. As long as prices remain above 68500 for the week, the outlook for gold remains positive,” said Jateen Trivedi, VP Research Analyst, LKP Securities.
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Meanwhile, silver prices surged by 2.6% to reach $26.83 per ounce, marking its highest trading point in more than two years. On MCX, silver experienced a notable surge, increasing by ₹1,700 to reach ₹80,700 per kg, compared to its previous close of ₹79,000 per kg.
Platinum experienced a 1.6% increase, reaching $933.55, while palladium saw a 0.9% rise, reaching $1,013.00.
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