Gold prices remain firm despite record highs and Fed rate cut speculation
Gold prices held steady on Monday, demonstrating surprising resilience after a week of record highs. Investors kept a careful eye on the market, hoping to learn more about the Federal Reserve’s rate decrease timeline. As of 1121 GMT, spot gold was unchanged at $2,176.30 per ounce, having reached a new high for the fourth straight session on Friday at $2,194.99. This rise was triggered by statistics indicating a slowdown in the United States labour market.
The Dance of Gold: A Stable $2,183.20 for US Gold Futures
U.S. gold futures fell 0.1% to $2,183.20. The focus on gold continues, spurred by anticipation that the Federal Reserve would decrease interest rates later this year. Lukman Otunuga, a senior research analyst at FXTM, commented, “Gold continues to shine on predictions that the Fed would decrease interest rates this year. The market may be waiting for the impending US inflation figures.”
US Inflation Data: A Critical Moment for Gold Investors
The anticipation is strong as the US consumer price inflation (CPI) data for February is set to be released on Tuesday. Otunuga adds, “Should the CPI print be hotter-than-expected, this might hurt expectations for Fed rate cuts, depressing gold as a result. A cold report is anticipated to increase demand for the zero-yielding metal.”
FedWatch: Traders see a 70% chance of rate cuts by June
According to the CME FedWatch tool, traders are actively pricing in a greater than 70% possibility that the Federal Reserve would lower interest rates by June. This stance is reinforced by the increase in net long positions among COMEX gold speculators, which rose by 63,018 contracts to 131,060 in the week ending March 5. Matt Simpson, a senior analyst at City Index, commented: “With large speculators having increased net-long exposure at their quickest weekly pace in 3.5 years last Tuesday, gold is clearly in demand and not a market to short for any length of time whilst traders expect Fed cuts.”
The Precious Metals Landscape: Silver, Platinum, and Palladium Dynamics
Spot silver remained stable at $24.30, while platinum rose 1.3% to $924.40 per ounce. Palladium followed the rally, rising 0.8% to $1,028.25. UBS analysts offered a cautiously optimistic view on platinum, citing substitution from palladium to platinum in autocatalysts and the possibility of Fed rate reduction later this year.
Reporting and analysis are a collaborative effort
Ashitha Shivaprasad and Harshit Verma in Bengaluru bring you this analytical gold market news, with Daksh Grover providing supplementary information. Barbara Lewis and Kirsten Donovan extensively revised the text to ensure a complete and accurate assessment of the present state of the precious metals market.
Conclusion
Despite reaching historic highs, gold prices remained solid, demonstrating surprising tenacity. Investors were keen to learn more about the Federal Reserve’s prospective rate reduction, which helped spot gold remain stable at $2,176.30 per ounce. The expectation of lower interest rates fuelled the precious metal’s rise, with a focus on anticipated US inflation statistics. With a 70% possibility of rate reduction by June, traders increased net long positions, confirming gold’s demand. Silver’s price remained stable, but platinum rose and palladium rallied. Analysts are cautious about platinum’s prospects given shifting dynamics.
