Gold Hits Another Record as Investors Await US Inflation Print

(Bloomberg) — Gold extended its bull run to a fresh record ahead of the next set of US inflation data on Wednesday that could provide insight into the Federal Reserve’s next steps.

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Bullion jumped as much as 1.1% to $2,365.35 an ounce, after closing 0.4% higher on Monday. Economists surveyed by Bloomberg expect that March’s inflation print may show some some signs of easing, a scenario that would provide the Federal Reserve with more wiggle room to cut rates.

That’s important for gold as it doesn’t pay interest, and thus in theory becomes more attractive when rates are lower.

Gold is up more than 18% since mid-February, a move that has left some onlookers puzzled because of the lack of any obvious trigger — especially given traders’ conviction on three quarter-point rate cuts is fast fading, with markets now favoring just two reductions.

Still, heightened geopolitical risks in the Middle East and Ukraine, plus buying by central banks, led by China, have added some bullish momentum for the metal.

The metal is enjoying “strong underlying momentum with the buy-on-dip still the prevailing strategy among traders,” said Ole Hansen, commodity strategist at Saxo Bank A/S. With so many bullish tailwinds, gold “is in desperate need for consolidation, but FOMO is on clear display currently” he said.

Spot gold rose 0.9% to $2,360.35 an ounce at 11:16 a.m. in London, even after Treasury 10-year yields climbed to the highest since November as traders positioned for the inflation data. The Bloomberg Dollar Spot Index slipped 0.1%, while silver, platinum and palladium all rose.

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