Gold Vaults Over Record Highs on Rate Cut Bets!
London: 1 April 2024 (TraderMade): Gold prices are on a tear, shattering records and reaching new all-time highs above $2,260 per ounce! This surge is fueled by growing indications that the Federal Reserve will cut interest rates as soon as June.
Lower Rates, Higher Demand
The prospect of a rate cut has investors flocking to gold. Since gold doesn't offer interest, rising rates make it less attractive compared to other investments. With a potential rate cut, gold becomes a more competitive option, driving up demand and prices.
Not Just the Fed
While the Fed's stance is a major factor, other forces are also at play. Geopolitical tensions and safe-haven buying are adding to the gold rally. Additionally, central banks across the globe are increasing their gold purchases, further tightening supply and pushing prices higher.
The coming week will be crucial, with key economic data like the US ISM Manufacturing PMI and Nonfarm Payrolls report expected to shed light on the health of the US economy and the Fed's next move.
