Gold Hits Record High Amid Rate Cut Bets and Geopolitical Tensions
Gold Surges to New Heights
Gold reached a record high on Tuesday, surpassing $2,100 per ounce as investors bet on a potential U.S. interest rate cut in June. The rally was further fueled by safe-haven demand stemming from the conflict in the Middle East.
Market Response and Predictions
The precious metal surged by 0.8% to $2,132 per ounce, hitting an all-time high of $2,141.59 earlier in the day. Similarly, U.S. gold settled approximately 0.7% higher at $2,141.9, marking its highest level since December at $2,135.40.
Factors Driving Gold Prices
Experts attribute the surge to the increasing belief in an imminent Fed rate cut, with markets anticipating further gains. Bart Melek, TD Securities’ head of commodity strategies, stated that gold could potentially exceed $2,300 in the second quarter.
Geopolitical and Economic Influences
Gold’s role as a safe-haven asset during times of uncertainty, combined with geopolitical tensions in the Middle East, has propelled its value upwards. The ongoing Israel-Hamas conflict has contributed to a $300 increase in gold prices since its onset.
Future Projections and Market Analysis
While the Fed’s stance on interest rates remains crucial, traders foresee a 70% likelihood of rate cuts by June. The upcoming testimony by Fed Chair Jerome Powell and Friday’s employment report will provide further insights into the economic scenario.
Impact on Precious Metals
Spot silver experienced a slight decline to $23.70 per ounce, following a recent peak. Meanwhile, platinum and palladium prices dropped by 1.8% and 1.1% respectively, showcasing varied movements in the precious metals market.
