The price of gold surged to a fresh record high, edging closer to the $2,200 per ounce mark, propelled by optimism surrounding a potential interest rate cut by the Federal Reserve following robust US jobs data.
Spot gold experienced a notable uptick, rising by as much as 1.3% to reach $2,187.30 per ounce by 12:15 p.m. ET, marking its eighth consecutive day of gains. Concurrently, US gold futures saw a 1.5% increase, reaching $2,196.80 per ounce in New York.
The rally in gold prices gained further momentum on Friday after the release of data indicating that US employment figures for February exceeded expectations, accompanied by a moderation in wage gains. These developments have underscored perceptions of robust economic growth and subdued inflationary pressures.
Market sentiment has been further buoyed by the Federal Reserve’s anticipated shift towards a more accommodative monetary policy, which is widely anticipated to enhance gold’s attractiveness compared to yield-bearing assets such as bonds. Additionally, ongoing geopolitical tensions in regions such as the Middle East and Ukraine have reinforced gold’s status as a safe-haven asset.
The recent surge in gold prices has prompted speculation among analysts regarding the entry of significant new buyers into the market, including investment funds positioning themselves on the global macroeconomic landscape.
Looking ahead, analysts are contemplating the factors that could sustain the upward trajectory of gold prices. Ewa Manthey, commodities strategist at ING Groep, emphasized the supportive role of safe-haven demand amidst geopolitical uncertainty and upcoming events such as the US election.
David Meger, director of metals trading at High Ridge Futures, echoed this sentiment, highlighting expectations of further interest rate cuts by the Federal Reserve and potential weakness in the US dollar as key drivers behind the continued ascent in gold prices.
