Gold prices surged for the third consecutive day on Tuesday, hitting a new all-time peak during the first half of the European session. This marks the tenth positive move in the previous eleven days, reflecting sustained investor interest in the safe-haven asset.
The optimism surrounding a potential ceasefire between Israel and Hamas waned quickly, contributing to a cautious market sentiment. This caution propelled investors towards safe-haven assets, notably gold, seeking refuge from geopolitical uncertainties.
The flight to safety also led to a retreat in US Treasury bond yields from multi-month highs reached on Monday. Consequently, the US Dollar faced pressure, providing further support to gold, which does not yield interest.
However, the prospect of the Federal Reserve delaying interest rate cuts is expected to prevent a significant decline in US bond yields and the US Dollar. This could limit further gains in gold prices, particularly considering the overbought conditions.
Traders are likely to adopt a wait-and-see approach, awaiting more clarity on the Federal Reserve’s monetary policy stance. Attention will be focused on the release of US consumer inflation figures for March on Wednesday, followed by the publication of the FOMC meeting minutes. These events are expected to impact near-term US Dollar dynamics and could influence gold prices accordingly.
