Gold price touches $2,350 on firm central bank demand
Staff Writer | April 8, 2024 | 7:26 am Intelligence Markets USA Gold
Gold’s hot run continues. Stock image.
"Gold kept its momentum on Monday, hitting $2,350 an ounce for the first time before paring gains, as investors shift focus to a key US inflation reading later this week.
By 9:55 a.m. EDT, spot gold was down 0.1% to $2,327.20 per ounce, having reached a new record $2,351.85 earlier. US gold futures, meanwhile, gained 0.2% at $2,350.80 per ounce.
The slight pause in gold’s rally comes as traders assess where US policymakers now stand on the timing of their pivot to lower borrowing costs, ahead of the March inflation data Wednesday. The Federal Reserve expects to cut this year, but has said it needs to see more evidence that inflation is easing first.
The precious metal remains supported well above $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.
Since then, gold has gone up by more than 18%, with at least some of the gains fueled by optimism that the Fed was getting closer to cutting rates. For the year, bullion is up by double digits at 13%, despite headwinds from strong US economic data.
Central bank demand has evidently been a supporting factor, with the People’s Bank of China reporting an addition for a 17th straight month in March.
“Gold bulls may have taken their latest cues from the People’s Bank of China (PBOC), which extended its buying spree of the precious metal for a 17th straight month in March,” said Han Tan, chief market analyst at Exinity Group, told Reuters.
Moreover, gold has also benefited from increased demand amid persistent tensions in the Middle East due to the metal’s safe-haven status.
“There’re only two buyers in my book that would have that kind of attitude towards gold. One could be program buying by a central bank. The other alternative, impervious to market fundamentals, is option buying,” said independent analyst Ross Norman.
Meanwhile, UBS Group has boosted its year-end gold outlook by 11% to $2,500 an ounce, with a revival in demand for gold-backed exchange traded funds set to support another leg up ... "
https://www.mining.com/gold-price-touch ... ank-demand
(With files from Bloomberg and Reuters)