Gold price climbs above $2,100

Bengaluru — Gold struck a record high on Tuesday, moving further above $2,100/oz in a rally sparked by growing bets for a US interest rate cut in June, with safe haven demand from war in the Middle East also tipping the scales in bullion’s favour.

Spot gold gained 0.6% to $2,127.99/oz at 2.09pm GMT, having scaled a record $2,141.59 earlier. US gold futures firmed 0.5% to $2,135.80.

Bullion last hit a historic peak in December at $2,135.40/oz.

“We wouldn’t be surprised if gold gives back some of these gains as the Federal Reserve talks down imminent cuts, but once rate cuts look certain, we expect gold to trade significantly higher,” said Nitesh Shah, commodity strategist at WisdomTree.

“Geopolitical risks emanating from the Red Sea and a year with a dense election calendar globally will likely see continued strength in retail demand for gold.”

Fed chair Jerome Powell’s congressional testimony on Wednesday and Thursday will be closely watched for more clarity on the US interest rate path. The next major US economic release will be February’s employment report due on Friday.

Traders now see a 68% chance that the Fed will start cutting rates by June, according to the CME FedWatch tool.

The non-yielding metal is pressured when high interest rates to tame inflation raise returns on competing assets such as bonds and boost the dollar, making gold costlier for buyers with other currencies.

Gold, often used as a safe store of value during times of political and financial uncertainty, has climbed more than $300 since the start of Israel-Hamas war.

Hamas negotiators will remain in Cairo for another day at the request of mediators, keeping ceasefire talks going after two days with no breakthrough, an official from the militant group said.

Spot platinum fell 1.8% to $881.01/oz and palladium dropped 2.2% to $938.81. Spot silver rose 0.4% to $23.99.

Reuters