Gold prices increased on Tuesday, remaining close to a record high reached in the previous session, supported by robust central bank purchases, while investors awaited signals from the U.S. Federal Reserve’s policy meeting minutes and inflation data.
As of 0313 GMT, spot gold was up 0.2% at $2,343.76 per ounce, following a record peak of $2,353.79 on Monday. U.S. gold futures also rose by 0.5% to $2,362.60.
Tim Waterer, chief market analyst at KCM Trade, noted that gold has been favored in financial markets, driven by central bank buying and speculative activities, consistently pushing prices to new highs. Alongside safe-haven demand, these factors have contributed to favorable conditions for gold.
Market attention is now focused on the minutes from the Fed’s March policy meeting and the release of U.S. Consumer Price Index (CPI) data scheduled for Wednesday.
Despite maintaining interest rates within the 5.25%-5.50% range during its March meeting, Fed policymakers indicated their anticipation of reducing rates by three quarters of a percentage point by the end of 2024.
Following a robust U.S. jobs report last Friday, expectations for the number of rate cuts this year have been adjusted to two, down from the previously projected three to four, according to LSEG’s rate probability app. The allure of holding non-yielding gold diminishes with higher interest rates.
Waterer highlighted that inflation data this week could pose a risk if the readings exceed expectations. Nevertheless, gold has shown resilience to rising bond yields this week, which could signal bullish prospects for gold in the medium term.
Spot silver experienced a slight dip of 0.1% to $27.81 per ounce, despite reaching its highest levels since June 2021 earlier in the session.
In other precious metals, India’s silver imports surged by 260% in February to a record high, buoyed by lower duties that prompted substantial purchases from the United Arab Emirates. Platinum rose by 1.6% to $973.35, while palladium increased by 1% to $1,053.50.
