Gold Price Storms Through $2,350 to Hit a Fresh Record High

SEATTLE (Scrap Monster): Gold price witnessed a sudden $27 upswing and stormed through the $2,350 barrier to refresh an all-time high at $2,354 in Asian trading on Monday. Despite easing geopolitical tensions between Israel and Hamas and reducing bets of a June US Federal Reserve (Fed) interest rate cut, Gold price extends its record-setting rally primarily on reports of potential robust Gold purchases by global central banks.

A Chinese official reported on Sunday, the People’s Bank of China (PBOC) purchased Gold for its reserves for the 17th straight month in March. Bullion held by the Chinese central bank rose to 72.74 million fine troy ounces last month, the official said.

Meanwhile, markets are expecting robust Gold purchases by global central banks later this year, therefore, advancing their purchases and ramping up Gold price to a new record high. gold demand from central banks totaled 1,037.4 metric tons in 2023, just below the record high set in 2022 at 1,081.9 metric tons, according to the World Gold Council (WGC).

The  WGC report showed that global central banks' purchases of gold rose by 19 metric tons in February, up for a ninth consecutive month.

However, it remains to be seen if Gold price sustains the record-setting rally ahead of Wednesday’s Consumer Price Index (CPI) from the United States (US). On Friday, the US economy added 303,000 jobs in March, against expectations of 200,000 job additions and the 275,000 previous figure. Strong US Nonfarm Payrolls number diminished the odds of a June Fed rate cut from about 62% to about 48%, at the moment, according to CME Group’s FedWatch Tool.

Also, easing Middle East geopolitical tensions could act as a headwind to the Gold price upsurge. Egypt’s Al-Qahera News state-affiliated TV channel said early Monday, citing a senior Egyptian source, “progress has been made in discussions in Cairo on a Gaza conflict truce and there is agreement on the basic points between all parties involved.”

Courtesy: www.fxstreet.com