Gold hits record high on buying momentum, geopolitical risks

GOLD extended its record run on Tuesday fueled by buying momentum and geopolitical risks, while the spotlight shifted to the US Federal Reserve’s policy meeting minutes and United States’ (US) inflation data for insights into US rate cut timeline.

Spot gold was up 0.3% at $2,346.57 per ounce by 2:06 p.m. ET (18:06 GMT) after hitting a record high of $2,365.09.

US gold futures settled 0.5% higher at $2,362.40.

“Technical buying momentum will continue in the gold market unless the consumer price index (CPI) data comes out much hotter-thanexpected. A cooler inflation report could take prices to $2,400,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

The US central bank’s policy meeting minutes and US CPI data are due on Wednesday.

Bullion is considered a hedge against inflation and geopolitical uncertainties, but higher interest rates tend to dull the appeal of holding the non-yielding asset.

“The fundamentals underpinning the current rally include growing geopolitical risk, steady central bank buying and resilient demand for jewellery and bars and coins,” the World Gold Council said in a note.

“With the prospect of lower interest rates ahead, the suggestion is that (gold exchange-tradedfunds) ETFs have missed the rally and are now under-allocated.”

CME Group data showed that the market is pricing in a 53% chance of a rate cut in June.

“Despite my long-term bullish outlook on gold, given the current conditions, I anticipate a bearish reversal, perhaps even a minor one,” said Fawad Razaqzada, market analyst at City Index in a note.

Spot silver rose 0.5% to $27.97 per ounce after hitting its highest level since June 2021 earlier in the session. —