Cape Times

BULLION HAS HIT ANOTHER RECORD HIGH ON US FEDERAL RESERVE RATE CUT BETS

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GOLD HIT ANOTHER record high yesterday as investors grow confident that the Federal Reserve will cut interest rates this year, even after data showed a slight uptick in a key inflation report. The precious metal has enjoyed healthy buying interest this year as the US central bank hints at an easing of credit conditions. It hit a new high of $2 265.73 (R42 699) yesterday, according to Bloomberg News. On Friday, the closely watched personal consumptio­n expenditur­es (PCE) index the Fed's preferred gauge of infla tion – showed a small on-year rise in March compared with February, though the core reading eased slightly. Federal Reserve chairperso­n Jerome Powell said the report was “pretty much in line with our expectatio­ns” and decision-makers were on track to hit their long-term inflation target of 2%. He said that while the recent inflation data was higher than the Fed would have liked, the February figures were “definitely more along the lines of what we want to see”. The data appeared to have little impact on traders' expectatio­ns for a June interest rate cut, though Powell warned they were unlikely to fall to the levels seen after the 2008 global financial crisis. Adding to the upward pressure on prices is its demand as a safe haven in times of turmoil owing to growing geopolitic­al tensions, with concerns that Israel's war on Hamas in Gaza will spread further. An air strike in Lebanon on Sunday stoked further tensions, with Israel saying a Hezbollah missile unit commander had been “eliminated”. Israel and the Iranbacked group have been exchanging near-daily cross-border fire for months. Traders are also keeping a close eye on developmen­ts in the long-running Ukraine conflict. Because bullion does not generate any interest, it benefits when central banks lower borrowing costs, because its safehaven status makes it more attractive to investors.

 ?? | FILE Photo ?? GOLD HIT ANOTHER fresh record high yesterday as investors grow confident that the Federal Reserve will cut interest rates this year, even after data showed a slight uptick in a key inflation report.
| FILE Photo GOLD HIT ANOTHER fresh record high yesterday as investors grow confident that the Federal Reserve will cut interest rates this year, even after data showed a slight uptick in a key inflation report.

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