GOLD PRICE REFRESHES ALL-TIME HIGH ON FIRM FED RATE-CUT BETS FOR JUNE

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  • Gold price trades close to all-time highs near $2,160 as expectations for a Fed rate cut in June increase.
  • The US Dollar has weakened as recent data doubts the strong momentum of US growth.
  • Investors will keenly focus on the US NFP data for fresh impetus.

Gold price (XAU/USD) extends its winning streak for the seventh trading session on Thursday. The precious metal refreshes all-time highs near $2,160 amid multiple tailwinds. Firm expectations for a rate-cut decision by the Federal Reserve (Fed) in the June monetary policy meeting have strengthened the appeal for Gold. Improved safe-haven demand due to uncertain global financial conditions has also strengthened demand for Gold. 

A sharp decline in US Treasury yields has reduced the opportunity cost of holding investments in non-yielding assets, such as Gold. 10-year US Treasury yields are slightly up by 0.2% at 4.11% in Thursday’s European session, but have dropped sharply from 4.22% in the last two trading sessions. 

Yields on interest-bearing government bonds slumped as Fed Chair Jerome Powell said in his semi-annual report presented to Congress that rate cuts would be appropriate sometime this year, even though he also said it is not assured that inflation will return sustainably to 2%.

The US Dollar Index (DXY) has dropped to a monthly low near 103.20 amid uncertainty over the United States economic outlook. Going forward, the US Dollar will be guided by the US Nonfarm Payrolls (NFP) data for February, which will be published on Friday. Also, Fed Powell will testify before Congress for the second day at 15:00 GMT.


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