Gold prices hit a new record high for the fourth consecutive session on Wednesday as a cocktail of factors, including rising tensions in the Middle East, expectations for interest rate cuts in the US and persistent inflation, boosted the precious metal’s allure.
Spot gold was 0.1% higher at $2,283.07 an ounce as of 10:55 am EDT (1455 GMT), after hitting a record high of $2,288.09 earlier in the session. U.S. gold futures rose 0.9% to $2,303.50.
“The potential for rate cuts is still there, but the data is still very strong. This is an election year, so I don’t think the Fed will be held responsible for a market crash,” said Daniel Pavilonis, senior market strategist at RJO Futures.
Some Federal Reserve policymakers said Tuesday they think it is “reasonable” to cut U.S. interest rates three times this year, even as stronger recent economic data has raised doubts among investors about that outcome.
Gold, a hedge against inflation and a safe haven in times of political and economic uncertainty, is up more than 10% so far this year, helped by strong central bank buying and demand for safe havens.
Data showed US services sector growth slowed further in March, while a measure of the prices companies pay for inputs fell to the lowest level in four years, boding well for the inflation outlook.
Investors are now awaiting comments from Fed Chairman Jerome Powell later in the day for clues on when the central bank will make its first rate cut.
“We remain quite cautious on gold and believe there is more downside than upside from current levels. That said, we also recognize that near-term price risks are tilted to the upside given the bullish market mood,” said Julius Baer analyst Carsten Menke.
Silver rose 2.6% to $26.83 an ounce, trading at its highest level in more than two years.
Platinum rose 1.6% to $933.55 and palladium rose 0.9% to $1,013.00.
Tags: Gold extends record run strong demand safe haven hopes interest rate cuts April
