Gold Reaches All-Time High as US Data Revives Expectations of June Rate Cut

Gold prices continued to surge to unprecedented highs on Monday following the release of data indicating a slowdown in the pace of inflation in the United States. This development reinforced expectations that the Federal Reserve could implement its first interest rate cut in June, as lower interest rates diminish the opportunity cost of holding gold.

As of 1224 GMT, gold in spot transactions rose by 0.6 percent to $2,244.89 per ounce, after reaching an all-time high of $2,262.19 per ounce earlier in the session. Meanwhile, US gold futures surged by 1.2 percent to $2,265.60 an ounce.

Giovanni Stanovo, an analyst at UBS, commented on the situation, stating, “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.”

Data released on Friday indicated that US prices moderated in February, thereby increasing the likelihood of a rate cut by the Fed in June. Federal Reserve Chairman Jerome Powell remarked that the February inflation data was “closer to what we want to see.”

Since the beginning of the year, gold has experienced a surge of over eight percent, bolstered by growing expectations of lower interest rates, increased demand for safe-haven assets, and central bank purchases amid geopolitical tensions.

Additionally, gold prices reached unprecedented highs when evaluated against other currencies, including the euro, yuan, yen, Indian rupee, and pound sterling.

In contrast, other precious metals saw declines in spot transactions on Monday. Silver fell by 0.4 percent to $25.06 per ounce, platinum dropped by 0.8 percent to $900.74 per ounce, and palladium decreased by 1 percent to $1,004.69 per ounce.