Gold prices yesterday drove higher to a fresh record above US$2,350 an ounce as investors shifted focus to the release of a key US inflation reading tomorrow, while geopolitical risks also added to its appeal.
Spot gold was 0.2 percent higher at US$2,335.38 an ounce as of 1:41pm in Singapore, after earlier touching a record US$2,353.95.
The precious metal remains supported well above US$2,300, after notching a series of fresh all-time highs in the past few weeks.
Photo: Bloomberg
Yet, the move has left some onlookers puzzled amid a lack of any obvious trigger for the sudden rally which began in mid-February — especially as traders have unwound bets for steep rate cuts by the US Federal Reserve during that period. Higher rates are typically negative for gold, which does not pay interest.
Gold is up more than 18 percent since then, with at least some of the gains fueled by optimism that the Fed was getting closer to cutting rates.
Central bank demand has also been a factor, with the People’s Bank of China (PBOC) reporting an addition for a 17th straight month last month.
Bullion held by the PBOC rose 0.2 percent to 72.74 million troy ounces last month, according to official data released on Sunday. It was the smallest increase in the run of monthly purchases that began in November 2022.
Global central banks, led by China and India, continued adding to their gold reserves in February, marking a ninth straight month of growth, according to the World Gold Council.
Elsewhere, bullion has benefitted from increased haven demand amid persistent tensions in the Middle East.
Israel on Sunday said the country is removing some troops from southern Gaza after Prime Minister Benjamin Netanyahu said victory was within reach.
Meanwhile, Iran is preparing a response to a suspected Israeli attack on its consulate in Syria, while Hezbollah warned that it is ready for war.
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