Gold prices surged to near all-time highs, nearing $2,230 per troy ounce, as the precious metal aimed to extend its winning streak for the fifth consecutive session on Friday. However, trading volumes remained light as market participants observed Good Friday.
The allure of gold shone brightly for buyers as market sentiment leaned towards major central banks initiating an interest rate-cut cycle this year.
Investors grew increasingly confident in gold as they anticipated three rate cuts from the US Federal Reserve (Fed) in the coming months. Chicago Fed President Austan Goolsbee, expressing a dovish stance, projected three cuts but stressed the necessity of further evidence regarding inflation subsiding before implementing any action.
European Central Bank (ECB) policymaker Francois Villeroy suggested that achieving the ECB’s inflation goal of 2% is attainable. However, he cautioned against escalating downside risks if the ECB opts against rate cuts. ECB executive board member Fabio Panetta remarked on Thursday that “the conditions to begin easing monetary policy are emerging.”
In Europe, the Swiss National Bank unexpectedly cut rates at its March meeting, sparking speculation that other major central banks might follow suit. Meanwhile, although the Bank of Japan ceased its negative rate policy, it is expected to maintain an accommodative stance for the foreseeable future.
Despite the United Nations Security Council passing a resolution urging a ceasefire between Israel and Hamas, along with the release of hostages, the conflict in the Gaza Strip continued unabated. Palestinian militants have yet to release any captives, and tensions escalated further as Israeli forces besieged two additional Gaza hospitals on Sunday, trapping medical personnel amidst intense gunfire.
The escalation of geopolitical tensions has heightened demand for safe-haven assets like gold.
