By Anjana Anil
Gold rose 1% and hit a record high on Tuesday, building on its recent rally as West Asia tensions fed its safe-haven appeal, while investors latched on to fresh cues for more U.S. interest rate cuts.
Spot gold was up 0.9% at $2,651.87 per ounce by 1643 GMT after earlier hitting a record of $2,654.96. U.S. gold futures gained 0.9% to $2,677.00.
Gold has risen 28% so far in 2024, as fears of an all-out war in the West Asia escalated.
The current spike is being driven by a “flight to safety on West Asia concerns; that there’s going to be some renewed possible action by Iran… think we’ll continue to make another new set of highs,” said Bob Haberkorn, senior market strategist at RJO Futures.
Gold could go above $2,700, perhaps as soon as the end of this week, if we see a further West Asia escalation, and with talk of more rate cuts coming, Haberkorn added.
Israel struck Hezbollah targets in southern Lebanon and said it would keep up the pressure.
Bullion’s rally has also been propelled by the start of monetary easing by the U.S. Federal Reserve, which reduces the opportunity cost of holding zero-yield gold, especially following the central bank’s larger-than-usual 50 basis point cut last week.
Adding to the momentum, Chicago Fed President Austan Goolsbee indicated he anticipates more cuts in the coming year.
Traders await Fed Chair Jerome Powell’s remarks and U.S. inflation data later this week.
Investors also took stock of developments in top consumer China, with its central bank unveiling its biggest stimulus since the pandemic.
Major banks expect gold to extend its record-breaking price rally into 2025 because of a revival in large inflows to exchange-traded funds (ETFs) and expectations of additional interest rate cuts from prominent central banks.
Silver rose 4.8% to $32.14, platinum gained 3.1% to $985.95 and palladium climbed 1.6% to $1,057.93.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Sep 24 2024 | 11:27 PM IST
