Gold prices saw an increase on Tuesday, inching closer to the record peak attained in the preceding session. Robust central bank buying and caution among investors awaiting key economic indicators supported gold’s gains near record-high prices. Amidst this backdrop, gold emerged as the asset of choice, demonstrating resilience and attracting significant attention from market participants.
In Saudi Arabia, twenty-four-carat gold climbed 0.55 percent to SAR282.72 per gram and SAR8,793.68 per ounce.
Globally, spot gold rose 0.29 percent to $2,345.89 per ounce, as of 5:23 GMT, after hitting a record high of $2,353.79 per ounce yesterday. Meanwhile, U.S. gold futures gained 0.56 percent, recording $2,364.10.
Factors driving gold’s rally
Alongside traditional safe-haven buying, factors such as growing demand have contributed to the surge in gold prices. Analysts highlighted that prevailing conditions have been conducive for gold, attributing its buoyancy to a convergence of favorable market dynamics.
Moreover, the upcoming release of the Federal Reserve‘s March policy meeting minutes and U.S. Consumer Price Index (CPI) data on Wednesday has garnered significant anticipation among investors. The Fed maintained interest rates within the 5.25-5.50 percent range in March, signaling a potential reduction by three-quarters of a percentage point by the end of 2024. However, following a robust U.S. jobs report, market expectations for the number of rate cuts this year have been adjusted downward.
Higher interest rates typically diminish the allure of holding non-yielding assets like gold. Analysts cautioned that inflation data this week could pose a risk, particularly if readings lean towards the higher end of expectations. Despite this, gold prices have exhibited resilience amidst rising bond yields, suggesting a potentially bullish outlook for the precious metal in the medium term.
Read: Global gold prices continue record surge to $2,353.79, Saudi Arabia rates climb
India’s silver imports surge
While gold prices took the spotlight, silver also experienced notable movements, albeit in a slightly different direction. Spot silver dipped 0.1 percent to $27.81 per ounce, despite reaching its highest levels since June 2021 earlier in the session. Notably, India’s silver imports surged by a staggering 260 percent in February, hitting a record high. Lower duties and substantial purchases from the UAE propelled this surge in India’s silver imports.
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