Gold has struck a record high today, rallying further above $2,100 per ounce as traders bet on a US interest rate cut in June.
Spot gold gained 0.6 per cent to $2,127.99 per ounce as of 14:09 GMT.
The Fed Chair Jerome Powell will testify on Capitol Hill on Wednesday and Thursday
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Nitesh Shah, commodity strategist at WisdomTree, said: “We wouldn’t be surprised if gold gives back some of these gains as the Federal Reserve talks down imminent cuts, but once rate cuts look certain, we expect gold to trade significantly higher.
“Geopolitical risks emanating from the Red Sea and a year with a dense election calendar globally will likely see continued strength in retail demand for gold.”
Bullion is pressured when high interest rates, intended to try ease inflation, raise returns on competing assets, such as bonds, and boost the dollar, making gold more expensive for buyers with other currencies.
Traders are currently seeing a 68 per cent chance that the Federal Reserve will begin cutting interest rates by June, according to the CME FedWatch tool.
The Fed Chair Jerome Powell will deliver a congressional testimony on Wednesday and Thursday, which will be closely watched for a better idea of the US interest rate path.
On Friday, the US will publish February’s employment report.
Gold, often used as a safe haven of value during times of political and financial uncertainty, has increased by more than $300 dollars since the start of the Israel-Hamas war.
More to follow…
