Gold reaches a record high, supported by hopes of a US interest rate cut in June

On Monday, gold prices surged to a record high following reports indicating a moderation in US inflation during February. This development heightened expectations that the Federal Reserve (the US central bank) would implement interest rate cuts in June.

During spot transactions, gold prices jumped by 1 percent to reach $2,255.39 per ounce, with the precious metal hitting a peak of $2,256.09 per ounce earlier in the session. Meanwhile, US gold futures rose by 1.7 percent to $2,275.70 per ounce.

The dollar index experienced a 0.1 percent decline against a basket of competing currencies, rendering gold more attractive to holders of alternative currencies.

Federal Reserve Chairman Jerome Powell’s statement on Friday, regarding the latest US inflation figures being “consistent with what we want to see,” further fueled expectations of impending interest rate cuts.

Traders’ sentiment, as gauged by the FeedWatch tool of the CME Group, indicates a 69 percent likelihood of a rate cut by the US Federal Reserve in June. Lower interest rates typically enhance the appeal of holding gold as an investment.

In addition to gold, other precious metals also saw gains in spot transactions. Silver rose by 1 percent to $25.22 per ounce, platinum increased by 0.6 percent to $913.85 per ounce, and palladium edged up by 0.3 percent to $1,018.22 per ounce.