Gold prices hit another record high after fresh U.S. data spurs Fed cut expectations

Gold prices reached another record high, driven by expectations of U.S. interest rate cuts and the metal’s status as a safe haven asset. Spot gold rose 0.3% to $2,240.04 per ounce, while U.S. gold futures increased 0.8% to $2,257.10 per ounce, hitting a high of $2,286.4. Market speculators are gaining confidence in Fed rate cuts, with expectations for a cut in June. Despite a 2.8% year-on-year increase in the key Fed inflation gauge, the central bank is expected to maintain rates to consider rate cuts.
Gold prices tend to rise as interest rates fall, making gold more attractive compared to bonds in a low-interest environment. Overseas demand, particularly from China, has also contributed to the rally, driven by weak performance in real estate, stocks, and currency markets. Central banks worldwide are buying gold to diversify reserves due to geopolitical risks, inflation, and the weakening U.S. dollar, with China leading both consumer demand and central bank purchases.