Gold prices continued to rise to another record high near the levels of 2265.5 dollars per ounce on Monday morning, driven by expectations of a cut in US interest rates and its attractiveness as a safe haven asset.
Market observers expect the US Federal Reserve to cut interest rates next June, as this rise comes on the heels of data released on Friday, which indicate a slowdown in the Fed's preferred inflation gauge in February, indicating a possible decline in borrowing costs during the year.
US Federal Reserve Chairman Jerome Powell also said on Friday that the latest US inflation data is consistent with what we would like to see.
The Fed kept interest rates on hold at the conclusion of its last meeting in March, but stuck to its forecast of three rate cuts this year.
I think it's a really exciting moment for gold, as what is pushing gold higher is that many speculators in the market are really getting that confidence and comfort in the Fed's cuts, said Joseph cavatoni, market strategist at the World Gold Council on Monday.
Market observers expect the US Federal Reserve to cut interest rates in May or June.
Cavatoni of the World Gold Council said that the rise in gold so far is driven by strong purchases from the world's central banks in an attempt to diversify reserve portfolios due to geopolitical risks, domestic inflation and the weakening of the US dollar.
According to some opinions, the reason for the rise in gold is also that private investors in China were attracted to gold because the real estate sector performed poorly.
China is the main driver of consumer demand and central bank purchases of gold, according to data from the World Gold Council.
So far, only after the end of the first quarter of this year, gold has outperformed many major commodities, rising by more than 9% in the first quarter alone, as gold strengthens its position as a highly desirable safe haven asset.
