Ingots of 99.99 percent pure gold are processed at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, Sept 15, 2023. REUTERS/Alexander Manzyuk/File photo
Gold raced to an all-time high on Thursday, extending its record run this week as increasing bets for U.S. monetary easing added to sustained tailwinds for bullion from central bank buying and safe-haven demand.
Spot gold was up 0.4 percent at $2,156.93 per ounce as of 02:00 p.m. ET (1900 GMT), hitting record high of $2,164.09 during the Asian trading hours.
U.S. gold futures settled 0.2 percent higher at $2,165.2.
Powell said the Fed is “not far” from getting enough confidence that inflation is heading to the Fed’s 2 percent goal to be able to start interest-rate cuts.
Traders are now pricing in a 74-percent chance of a June rate cut, versus around 63 percent on Feb. 29, the CME’s Fedwatch Tool showed.
READ: Fed seen cutting US rates in June, risks skewed toward later move
A low-interest rate environment translates into reduced opportunity cost of holding non-yielding gold and weighs on the dollar, making bullion cheaper for overseas buyers.
Rate cut bets
Rate cut bets are driving gold prices and everyone is expecting they will come, said World Gold Council market strategist Joseph Cavatoni.
Central banks’ gold purchases also continue to be very strong, Cavatoni added.
READ: Gold extends rally to record as Powell hints at rate cut in 2024
Further market direction could come from Friday’s U.S. non-farm payrolls report.
In physical markets, the price surge was expected to dampen consumption during the Indian wedding season, but top buyer China could see robust safe-haven demand.
Geopolitical risks are also the major driver for bullion, said James Steel, precious metals analyst at HSBC.
“We only have a narrow group of assets that investors can really call safe haven, and gold is number one amongst them.”
Bullion has climbed over $300 since the start of the Israel-Hamas war.
However, the latest rally in gold has come alongside a rally in riskier assets.
Silver added 0.6 percent to $24.31, while platinum climbed 1.3 percent to $919.00 per ounce.
Palladium slipped 0.5 percent to $1,037.00 after surging as much as 12 percent on Wednesday.