GOLD Hits Record High Amid Rate Cut Speculation

Gold: Gold Surges Past $2,100, Reaches Record High on Rate Cut Bets

Gold prices moving in the A time high of $2140 due to Rate cuts is expected from the FED After June month. The Central Banks are enormously acquiring Gold by spending $300 billion in funds from Russian sanctions due to the war on Ukraine.

Gold Hits Record High above $2,100 on Rate Cut Speculation

XAUUSD has broken box pattern in upside

Gold futures settled at an all-time high on Monday as traders anticipate the Federal Reserve’s interest rate cuts in the second half of the year. The April gold contract gained $30.60, or 1.46%, reaching $2,126.30 per ounce, the highest level since its creation in 1974. This marks the second consecutive trading session of record-setting, with Friday’s closing at $2,095.70.

The VanEck Gold Miners ETF (GDX) also closed higher by 4.3%, marking its third consecutive day of gains and trading above the 50-day moving average for the first time since Jan. 12.

Despite high interest rates and a strong dollar, gold has performed well, driven by central banks buying significant amounts of gold after the U.S. and EU confiscated Russia’s foreign exchange reserves. The ongoing expectation of Fed rate cuts this year, coupled with declining inflation, supports gold’s upside potential.

According to Peter Boockvar, chief investment officer at Bleakley Financial Group, gold’s inflation-adjusted record of about $3,200 in 1980 suggests further potential upside.

Bart Melek, global head of commodity strategy at TD Securities, attributes gold’s rise to weaker-than-expected economic data, particularly in the manufacturing sector. Traders are betting on a June rate cut, according to the CME Fed Watch Tool. However, gold prices could face challenges if strong employment data contradicts rate cut expectations.

Year-to-date, gold is up 2.63%.

Gold: Gold Targets All-Time High on Strong Fed Rate-Cut Bets for June

Gold Rises Amid Fed Rate-Cut Bets and Market Caution

XAUUSD is moving in Ascending channel and market has reached higher low area of the channel

The surge in gold prices is attributed to cautious market sentiment and increasing expectations of a Federal Reserve (Fed) interest rate cut in the June policy meeting.

The Gold price outlook remains uncertain as investors await Fed Chair Jerome Powell’s testimony before Congress on Wednesday, along with key labor market data, including JOLTS Job Openings for January and ADP Employment Change data.

Jerome Powell’s commentary on inflation and interest rate outlook holds significance in clarifying uncertainty around the timing of potential rate cuts. A hawkish stance could impact gold negatively, increasing holding costs for non-yielding assets.

Later in the week, the US Nonfarm Payrolls (NFP) for February will provide insights into labor demand and wage growth, crucial factors for Fed policymakers. Achieving maximum employment is a key mandate when deciding on interest rates.

In the daily digest of market movers, Gold reaches a three-month high above $2,120, supported by confidence in a Fed rate cut in June. The CME FedWatch tool indicates a little over a 52% chance of a 25 basis points rate cut in the June meeting. For the upcoming March policy meeting, investors expect the Fed to maintain interest rates in the 5.25%-5.50% range.

Jerome Powell’s testimony will influence near-term gold demand, with expectations that he will emphasize no urgency for rate cuts due to resilient economic growth. The Fed is cautious about shifting its hawkish stance until convinced of sustainable inflation returning to the 2% target.

Atlanta Fed Bank President Raphael Bostic notes strong labor market and economic growth, providing time for the FOMC to decide on optimal rate cuts. Bostic sees success in inflation returning to the desired target without harming labor demand.

The US Dollar remains range-bound ahead of the US ISM Services PMI for February, expected to drop to 53.0 from January’s 53.4. The weak Service PMI may raise concerns about economic prospects.

The US Dollar Index (DXY) trades near a two-day low around 103.70 against six major currencies.

Gold: Gold Hits Three-Month High Amid Growing Rate Cut Expectations

Gold Hits Three-Month High on Increased Fed Rate Cut Bets

Gold prices reached a three-month peak on Monday, driven by growing expectations of a June interest rate cut by the U.S. Federal Reserve.

Last week, gold surged approximately $50, propelled by subdued U.S. manufacturing and construction spending, along with weaker price pressures. Phillip Streible, Chief Market Strategist at Blue Line Futures in Chicago, expressed optimism about gold potentially surpassing record highs, citing the upcoming speeches by Fed Chair Jerome Powell, who could adopt a more dovish tone. The possibility of a miss on U.S. jobs data on Friday is also seen as a factor supporting gold.

The market currently reflects a 66% probability of a Fed rate cut in June, according to the CME Fed Watch Tool.

Jim Wyckoff, Senior Analyst at Kitco Metals, highlighted that if inflation remains subdued, gold is likely to continue its upward trend. Gold typically faces challenges when high U.S. interest rates boost returns on competing assets like bonds, strengthening the dollar and making gold more expensive in other currencies.

XAUUSD is moving in Ascending channel and market has reached higher high area of the channel

Ole Hansen, Saxo Bank’s Head of Commodity Strategy, pointed out that heightened geopolitical tensions globally have reduced short-selling appetite, reinforcing gold’s appeal as a buy-on-dips asset.

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