Spot gold was up 0.7% to $2,354.37 per ounce by 1158 GMT after hitting a record high of $2,365.09
Gold prices hit a record high on Tuesday for an eighth consecutive session on geopolitical worries and support from momentum-following funds.
Spot gold was up 0.7% to $2,354.37 per ounce by 1158 GMT after hitting a record high of $2,365.09.
“Strong underlying momentum with the buy-on-dip still the prevailing strategy among traders,” Ole Hansen, head of commodity strategy at Saxo Bank, said.
“Geopolitical risks related to Russia/Ukraine and the Middle East are still playing a supporting role … the focus is changing from the negative impact of lower rate cut expectations towards higher and sticky inflation.”
The market is awaiting the Federal Reserve’s policy meeting minutes and U.S. inflation data due on Wednesday for fresh signals on the interest rate path.
Elevated interest rates usually constrain the appeal of holding non-yielding gold, but the precious metal has been ignoring these factors so far this month.
From the technical point of view, the April rally moved spot gold prices deep into overbought territory, as indicated by the relative strength index.
Spot silver rose 0.8% to $28.05 per ounce after hitting $28.18, the highest since June 2021.
“Silver is trying, for a second day, to gain a foothold above $28. If successful, gold may enjoy some additional tailwind,” Hansen added.
Bank of America analysts expect gold to average $2,500 by the fourth quarter, potentially hitting $3,000 by 2025. Silver would benefit from that and stronger industrial demand taking it to more than $30 per ounce within the next 12 months.
“Demand from central banks and China’s retail buyers has been strong. If Western investors join the party on rate cuts, the yellow metal will move a leg higher,” BofA analysts said, adding that gold could rise further.
Platinum gained 2.0% to $977.33 and palladium rose 1.5% to $1,058.93. Palladium prices, according to BofA, are set to trend below underperforming platinum in the longer term as demand is dominated by auto catalysts.
Source: Zawya
