Gold touched an all-time high as fund buying combined with speculation over a Federal Reserve pivot and geopolitical and financial risks underpinned a rally in the precious metal. Bullion rose as much as 1.3 percent to $2,141.
Gold touched an all-time high as fund buying combined with speculation over a Federal Reserve pivot and geopolitical and financial risks underpinned a rally in the precious metal.
The scale of the move surprised some market watchers, particularly since there hasn’t been a significant change in expectations for the Fed’s easing pivot or other macroeconomic drivers during that time. While the timing of the Fed’s pivot remains uncertain, signs that it is getting closer have supported gold since mid-February. Swaps markets show a 64 percent chance of a rate cut in June, a higher probability than early last month. Lower borrowing costs are typically positive for the precious metal, which doesn’t offer any interest.
In the first months of this year, gold’s role as a haven asset is being underlined by elevated geopolitical risks, with attacks on shipping in the Red Sea showing escalating Middle East tensions. China’s economic woes and the US presidential election at the end of the year make it a potentially volatile mix.