Hong Kong - Investors are increasingly confident that the Federal Reserve will cut interest rates this year, sending gold prices to a r...
Hong Kong - Investors are increasingly confident that the Federal Reserve will cut interest rates this year, sending gold prices to a record high on Monday, April 1st. This comes despite a slight rise in a key inflation indicator.
Gold has seen strong buying interest in 2024 a sthe US central bank hints at looser lending conditions. According to Bloomberg News, the price of gold reached a new peak of US$2,256.44 on Monday.
While recent inflation data showed a small increase compared to February, the Fed's preferred gauge, the core Personal Consumption Expenditures (PCE) index, saw a slight decline. Fed Chair Jerome Powell downplayed the data, stating it aligned with their expectations and that policymakers remain committed to reaching their 2% inflation target.
Despite the inflation data, investors remain confident in a potential June rate cut, although Powell cautioned that cuts wouldn't be as drastic as those seen after the 2008 financial crisis.
Adding fuel to the gold price surge is its status as a safe haven investment during times of uncertainty. Geopolitical tensions, particularly the ongoing conflict between Israel and Hamas in Gaza, as well as the long-standing war in Ukraine, are contributing to this demand.
Furthermore, gold benefits from falling interest rates. Because it doesn't generate interest itself, lower borrowing costs from central banks make it a more attractive option for investors seeking a safe haven for their assets.
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