Gold prices surged to a record high on Thursday, marking their seventh consecutive daily rise, buoyed by lackluster U.S. economic data and signals from Federal Reserve Chair Jerome Powell hinting at potential rate cuts if inflation eases.
As of 0723 GMT, spot gold rose 0.3% to $2,155.42 per ounce, while U.S. gold futures gained 0.2% to $2,163.10. The precious metal achieved an all-time high of $2,161.09 earlier in the session, poised for its longest intra-day winning streak since at least November 2021.
Powell’s remarks on possible interest rate cuts in the coming months, coupled with evidence of declining inflation, fueled the latest leg of gold’s record-breaking rally. Lower interest rates enhance the appeal of non-yielding assets like gold.
The marginal weakness in U.S. data provided further impetus for the gold rally. However, analysts suggest that the magnitude of the movement may be influenced by significant futures buying that began last Friday, according to Marcus Garvey, head of the commodities strategy team at Macquarie.
The decline in U.S. Treasury yields and the dollar on Wednesday, following Powell’s comments and soft labor market data, contributed to the attractiveness of gold. If upcoming labor market or inflation data reveals weakness, analysts anticipate a short-term target of $2,300 based on technical levels.
While spot silver fell 0.4% to $24.08, platinum dipped 0.3% to $904.83 per ounce, and palladium slipped 1.5% to $1,026.80 after a significant surge of over 12% in the previous session. The broader economic environment, central bank buying due to geopolitical uncertainty, and a slowdown in China are expected to keep gold a safe investment, according to Jigar Pandit, head of commodity and currency business at BNP Paribas’ Sharekhan.
