Gold stays close to record high

Bengaluru — Gold prices rose on Tuesday, hovering near a record peak hit in the previous session, supported by firm central bank buying, while investors watched out for the US Federal Reserve’s policy meeting minutes and inflation data for fresh signals.

Spot gold was up 0.2% at $2,343.76/oz by 3.13am GMT, after hitting a record high of $2,353.79 on Monday. US gold futures gained 0.5% to $2,362.60.

“Gold has been the ‘asset of choice’ in financial markets, with an undercurrent of central bank buying and speculative flows sending the price to higher highs on a regular basis,” said Tim Waterer, chief market analyst at KCM Trade.

Along with safe-haven buying, demand added to the bullish mix signalled conditions had been ripe for gold, Waterer said.

The minutes of the Fed’s March policy meeting and the US consumer price index (CPI) data is due on Wednesday.

The Fed held interest rates steady at 5.25%-5.50% range, but policymakers indicated they still expected to cut them by three quarters of a percentage point by end-2024 at its March policy meeting.

After a strong US jobs report last Friday, the market pared expectations for the number of rate cuts this year to two, from three to four a few weeks ago, according to LSEG’s rate probability app.

Higher interest rates reduce the appeal of holding non-yielding gold.

“Inflation data this week poses a risk if the readings come out on the hotter side of the ledger. But gold has been immune this week from rising bond yields, which could be a bullish signal for gold in the medium term,” Waterer said.

Spot silver dipped 0.1% to $27.81/oz, after hitting its highest levels since June 2021 earlier in the session.

India’s silver imports surged 260% in February to a record high, as lower duties encouraged large purchases from the United Arab Emirates.

Platinum gained 1.6% to $973.35 and palladium rose 1% to $1,053.50.

Reuters