Gold Hits Record Before US Inflation

Gold’s value escalated to a new high of more than $2,350 per ounce as investors turn their attention to the crucial US inflation evaluation due later this week. Global political uncertainties further bolstered the appeal of the precious metal.

In anticipation of the March inflation statistics on Wednesday, bullion experienced an increase of up to 1 per cent, undoing a previous dip, as traders mulled over the position of policymakers regarding the timing of the decrease in lending charges. Although the US Federal Reserve is planning to cut rates this year, they require further proof of deflation. Gold, which doesn’t produce interest, is generally negatively impacted by increased rates.

Gold remains steady above the $2,300 mark, after hitting several new record highs over recent weeks. However, the sharp surge since mid-February has left some observers perplexed due to the absence of any clear cause, especially as traders have reversed steep rate cut predictions during this timeframe.

Since mid-February, gold has seen an over 18% increase, with part of the boost driven by hopes that the US Federal Reserve will cut rates soon. The demand from central banks has also played a role, evidenced by the People’s Bank of China’s seventeenth consecutive month of gold additions in March.

Elsewhere, bullion has reaped the benefits of the mounting demand for safe havens amidst ongoing conflict in the Middle East. After Prime Minister Benjamin Netanyahu announced victory was imminent, Israel began withdrawing troops from southern Gaza on Sunday. Meanwhile, Iran is formulating a counterstrike to a presumed Israeli assault on its Syrian consulate and Hizbullah has expressed its war readiness.

In other updates, spot gold rose 0.2% to $2,335.38 per ounce, after reaching a high of $2,353.95. The index for the Bloomberg Dollar Spot remained relatively unchanged. Additionally, the values of silver, platinum, and palladium fluctuated. – Bloomberg.

Written by Ireland.la Staff

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