Gold price (XAU/USD) has surged to a record high, reaching around $2,165 during the early European session on Friday. The precious metal continues its upward trajectory, supported by a weaker US Dollar (USD) and declining US Treasury bond yields.
The current rally in gold is further fueled by rising expectations for the Federal Reserve (Fed) to initiate the first rate cut in its June meeting. The dovish commentary from Fed Chair Jerome Powell, who mentioned that the central bank is nearing confidence in reaching its 2% inflation target, has provided additional tailwinds for gold.
Investors are awaiting the US Nonfarm Payrolls (NFP) data, scheduled for release on Friday, which is expected to show the addition of 200,000 jobs to the US economy. A stronger-than-expected NFP could potentially strengthen the US Dollar and exert downward pressure on gold prices.
Meanwhile, European Central Bank (ECB) President Christine Lagarde hinted at potential policy easing in the June meeting. Although the ECB kept its benchmark rate unchanged at 4.0% in its March meeting, a downward revision of the inflation forecast for 2024 from 2.7% to 2.3% signals openness to future rate cuts.
Chinese investors seeking a safe haven amidst turmoil in the property sector and stock markets have also contributed to the demand for gold. Additionally, geopolitical tensions in the Middle East have further propelled the appeal of traditional safe-haven assets.
Gold traders are closely monitoring the Eurozone Gross Domestic Product (GDP) for the fourth quarter. In the US, the release of February labor market data, including Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings, will provide crucial indicators for traders seeking opportunities around gold prices.
