Gold soared to an all-time high on Tuesday, propelled by mounting expectations of monetary easing in the United States and ongoing geopolitical uncertainties that have attracted significant interest from momentum-driven investment funds, potentially paving the way for further gains in the precious metal.
The surge in gold prices was supported by a strong fundamental backdrop, including robust physical demand in Asia, consistent central bank acquisitions, and gold’s enduring status as a safe-haven asset. Central banks have been net purchasers of gold for the past eight consecutive months.
Spot gold (XAU=) climbed by 0.8% to reach $2,130.79 per troy ounce by 1540 GMT, after reaching a peak of $2,141.59, marking a new record high.
Rhona O’Connell, an analyst at StoneX, noted, “The price movement became self-fulfilling as stops were triggered, attracting momentum-driven funds into the market.”
From a technical analysis perspective, gold may have further upward potential towards $2,180, a Fibonacci projection level.
Alexander Zumpfe, senior precious metals trader at Heraeus, highlighted the significance of upcoming economic data releases and Federal Reserve Chair Jerome Powell’s testimonies in determining whether gold can sustain its current upward trajectory or enter a consolidation phase.
Independent analyst Ross Norman expressed optimism, predicting that gold could reach $2,300 this year, citing expectations of rate cuts by the Federal Reserve.
While holdings in gold-backed exchange-traded funds (ETFs) have declined recently, with SPDR Gold Trust’s (GLD) holdings falling by 7% this year, spot silver (XAG=) has also experienced a rally since Monday, surpassing key technical levels to trade at $23.94 per ounce.
Ole Hansen, Saxo Bank’s head of commodity strategy, highlighted the significance of silver’s participation in the current rally alongside gold, suggesting the potential for sustained growth.
In contrast, platinum and palladium prices declined by 1.4% and 1.6%, respectively. Hansen noted that platinum, despite being relatively inexpensive compared to gold, has lagged behind but could benefit once gold prices stabilize.
The gold-platinum ratio (XAU-XPT) has reached its highest level since March 2020, reflecting a notable divergence between the two precious metals.