Lower interest rates reduce the opportunity cost of holding gold.
By 1224 GMT, gold in instant transactions rose 0.6 percent to $2,244.89 per ounce, after reaching an unprecedented high level of $2,262.19 per ounce earlier in the session. US gold futures rose 1.2 percent to $2,265.60 an ounce.
“The inflation reading in the United States, which came slightly lower than expected last Friday, supports expectations of the Federal Reserve cutting interest rates in the middle of the year,” said Giovanni Stanovo, an analyst at UBS.
Data on Friday showed that US prices were moderate in February, which maintains the possibility of the Fed reducing interest rates in June. Chairman Jerome Powell said February inflation data was “closer to what we want to see.”
Gold has increased by more than eight percent since the beginning of the year, supported by growing expectations of lower interest rates, demand for safe havens, and central bank purchases amid geopolitical tension.
Gold prices recorded unprecedented high levels when evaluated in other currencies, including the euro, yuan, yen, Indian rupee, and pound sterling.
As for other precious metals, silver fell in spot transactions 0.4 percent to $25.06 per ounce, platinum fell 0.8 percent to $900.74 per ounce, and palladium fell 1 percent to $1,004.69.
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