The price of gold reached an all-time high on Tuesday, lifted by its safe-haven status as investors look ahead to lower US interest rates later this year.
Shortly after 1330 GMT, spot gold in New York reached $2,141.79 per ounce, surpassing the mark of $2,135.39 set in early December, before pulling back slightly
Gold has gained about 15% in value since the same stage last year.
The Thai Gold Traders Association website quoted selling prices of gold on Tuesday afternoon at 36,000 baht per baht-weight (15.2 grammes). Analysts say conditions are right for local gold prices to reach 38,000 baht this year.
“We are likely to see gold touching fresh all-time highs soon with potential easing of US interest rate cuts, while global geopolitical uncertainty and apprehension over economic activity are likely to fuel the high demand for gold,” said Ricardo Evangelista, a senior analyst at ActivTrades.
Gold rose by around $50 last week, spurred by poor US manufacturing data and easing price pressures.
Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said on Monday that he still thinks it will likely be appropriate for the US central bank to approve two quarter-point interest rate cuts by the end of this year.
The spotlight now shifts to Fed chairman Jerome Powell’s two days of congressional testimony on Wednesday and Thursday, amid a week packed with crucial economic data as investors look for further clues to the timing of rate cuts.
Traders now see more than 50% chance that the Fed will start cutting rates by June, according to the CME FedWatch tool, potentially boosting demand for the non-yielding gold.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, are down 10% from the previous year as of March 4.
“All inflows in the wake of the coronavirus pandemic in 2020 and two years later as a result of the war in Ukraine have been reversed. In view of the ongoing ETF (exchange-traded fund) selling, the price of gold is holding up surprisingly well,” Commerzbank analysts wrote.