By NewsBlogger Gold prices have reached a new all-time high of $2,165 due to a weaker US Dollar, declining US Treasury bond yields, and expectations of a rate cut by the US Federal Reserve, with concerns raised by Commerzbank strategists and analysis by MUFG Bank economists.
At a glance
- Gold prices hit a record high of $2,165 during the early European session.
- Rise attributed to weaker US Dollar, decline in US Treasury bond yields, and rate cut expectations by US Federal Reserve.
- MUFG Bank economists link surge to bets on a rate cut by Federal Reserve.
- Investors await US Nonfarm Payrolls data for fresh impetus.
- European Central Bank expects to ease its policy at the upcoming June meeting.
The details
Gold prices have surged to new all-time highs, reaching a record high of $2,165 during the early European session on Friday.
The sharp rise in Gold prices is attributed to a combination of factors, including a weaker US Dollar, a decline in US Treasury bond yields, and rising expectations for a rate cut by the US Federal Reserve.
Strategists at Commerzbank have expressed concerns about the optimism in the Gold market, viewing the sharp rise in prices as an exaggeration.
Analysis by MUFG Bank
Meanwhile, economists at MUFG Bank are analyzing the outlook for gold, linking the price surge to bets on a rate cut by the Federal Reserve.
Fed Chair Jerome Powell has indicated that the US central bank is close to gaining confidence in reaching its 2% inflation target, potentially leading to lower interest rates.
Investors are eagerly awaiting US Nonfarm Payrolls data for fresh impetus, with expectations of 200,000 jobs being added to the US economy.
Stronger-than-expected data may strengthen the Greenback and exert selling pressure on gold prices.
European Central Bank Policy
The European Central Bank (ECB) is expected to ease policy in its upcoming June meeting after maintaining the benchmark rate at 4.0% in the March meeting.
The ECB has also lowered its inflation forecast for 2024 from 2.7% to 2.3%, signaling possible rate cuts in the coming months.
Chinese investors have been purchasing gold as a safe haven amid concerns over the tumbling property sector and stock markets.
Geopolitical tensions in the Middle East have also contributed to the demand for safe-haven assets.
Gold traders are closely monitoring Eurozone Gross Domestic Product (GDP) for the fourth quarter, as well as US labor market data for February, including Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings.
Traders are seeking trading opportunities around gold prices based on data and cues from the market.
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| fxstreet.com |
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| – Gold has reached new all-time highs – Strategists at Commerzbank believe there is too much interest rate optimism in the Gold market – The sharp rise in Gold prices is seen as an exaggeration by Commerzbank analysts |
| fxstreet.com |
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| – Gold has reached a new record high due to bets on a rate cut by the US Federal Reserve – Economists at MUFG Bank are analyzing the outlook for gold – The price of gold is being driven up by expectations of a rate cut |
| fxstreet.com |
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| – Gold price (XAU/USD) reaches record high of $2,165 during early European session on Friday – Weaker US Dollar (USD) and decline in US Treasury bond yields support gold price – Rising expectation for first rate cut by Federal Reserve (Fed) in June meeting boosts demand for gold price – Dovish commentary from central bank policymakers creates tailwind for gold price – Fed Chair Jerome Powell states US central bank is close to gaining confidence in reaching 2% inflation target to begin lowering interest rates – Investors await US Nonfarm Payrolls (NFP) data for fresh impetus, expected to see 200,000 jobs added to US economy – Stronger-than-expected data may lift Greenback and exert selling pressure on gold price – European Central Bank (ECB) may ease policy in June meeting, maintains benchmark rate at 4.0% in March meeting – ECB lowers inflation forecast for 2024 from 2.7% to 2.3%, indicating possible rate cuts in coming months – Chinese investors purchase gold as safe haven amid tumbling property sector and stock markets – Geopolitical tensions in Middle East contribute to demand for safe-haven assets – Gold traders closely watch Eurozone Gross Domestic Product (GDP) for fourth quarter – US labor market data for February, including Nonfarm-Payrolls, Unemployment Rate, and Average Hourly Earnings, to be released – Traders seek trading opportunities around gold price based on data and cues from the market |
