In the bustling markets of gold, prices soared to new heights on Wednesday, fueled by the growing concerns of rising inflation. This surge in demand for gold as a hedge against inflation has been observed despite the doubts over an imminent U.S. interest rate cut and the rising Treasury yields.
Spot gold reached a new record of $2,286.24 per ounce, with an increase of 0.3%. The precious metal has been hitting consecutive record highs since last Thursday. Meanwhile, U.S. gold futures saw a 1.1% increase to $2,306.60.
City Index senior analyst Matt Simpson attributed this gold rally to the safe-haven flows as the geopolitical tensions between Ukraine and Russia persist. Despite the stronger U.S. economic data and the potential for the Fed to not cut rates in June, gold is still being favored by investors.
This week’s data revealed a surprise rebound in U.S. manufacturing, which, coupled with the rising raw materials prices, has ignited fears of a resurgence in inflation. This has led investors to hedge against inflation by investing in gold.
Gold has experienced a remarkable increase of more than 10.8% in value this year, marking its seventh consecutive day of gains. The precious metal is viewed as a hedge against inflation and a safe haven during times of political and economic uncertainty, which explains its recent surge.
Marex analyst Edward Meir pointed out that, at the moment, the driving force behind gold’s momentum is the fear of inflation rather than interest rates. Speculators, hedge funds, and commodity funds are also contributing to the gold rally by following their quantitative systems’ signals.
In other precious metals, spot silver saw a 1.2% increase to $26.41 per ounce, platinum rose by 0.8% to $925.72, and palladium edged up by 0.6% to $1,009.45.
Despite the soaring prices of gold, the precious metal’s impressive rally has not translated into a renewed interest in platinum jewelry in Asian markets, according to analysts.
Article generated from corporate media reports.
