Gold set a fresh record above US$2,350 (HK$18,404) an ounce before paring gains, as investors shifted focus to a key US inflation reading later this week.
Bullion rose as much as 1 percent as traders assessed where policymakers now stand on the timing of their pivot to lower borrowing costs, ahead of March inflation data tomorrow.
The US Federal Reserve expects to cut rates this year but needs to see more evidence that inflation is easing first. Higher rates are typically negative for gold, which doesn’t pay interest. The precious metal remains supported well above US$2,300 after notching a series of fresh all-time highs in recent weeks. Yet, the move has left some onlookers puzzled amid a lack of any obvious trigger for the sudden rally that began in mid-February – especially as traders have unwound bets for steep rate cuts during that period.
Separately, investors have piled on the most wagers for the yen to fall in 17 years, just as it teeters near a key level that would increase the risk of intervention from Japan. Net yen shorts held by leveraged funds and asset managers rose to 148,388 contracts during the week ended April 2, the highest since January 2007, according to Commodity Futures Trading Commission data.
Bloomberg