Gold glitters to record high as safe-haven bid overshadows jump in dollar
FxPremiere.com– FX Signals – Gold prices surged to a record Monday, as ongoing safe-haven demand helped the yellow metal shrug off a jump in the dollar after signs of U.S. economic strength put a damper on early-rate cut hopes.
Safe-haven currencies fall on hopes
Spot gold jumped 0.9% to $2,249.95 an ounce, while gold futures expiring in June rose 0.8% to settle at $2,257.10, though had been as high as $2,286.35 intraday prior to the release of U.S. manufacturing data.
The fresh record high on Monday comes even as an unexpected expansion in U.S. manufacturing activity cooled hopes of earlier rate cuts, pushing Treasury yields and dollar higher. As gold is priced in dollars, a stronger greenback tends to make gold more expensive and less attractive to foreign buyers.
Why trade CFDs on currency pairs?
The ISM manufacturing purchasing managers’ Index unexpectedly rose to a reading of 50.3 from 47.8. The index reading pushed above 50, which indicates an expansion in manufacturing, for the first time since Sept. 2022.
The odds of a June cut were now seen at 56% from 64% last week, according to Investing.com’s Fed Rate Monitor Tool.
Still, the strong economic data was weighed up against the core PCE price index data, the Fed’s preferred inflation gauge, which slowed more than expected in the February, suggesting that the recent upside surprises in inflation may have been an aberration from the recent deflation trend.
“We keep our forecast of a first cut happening in June,” Morgan Stanley said in a recent note. [W]e think that core PCE will average 0.22% from March to May and that these lower prints will be enough evidence pointing to sustained disinflation towards target,” it added.
Sentiment on the safe-haven gold has also been supported by geopolitical tensions that were ratcheted up following Iranian and Syrian media reports that an Israeli strikes hit a building next to Iran’s embassy in Syria’s capital Monday.
Gold glitters to record high as safe-haven bid overshadows jump in dollar
Gold glitters to record high as safe-haven bid overshadows jump in dollar
About The Author: Forex Signals
Telegram Forex Signals FX including Opening Forex Accounts. Subscribe now for major pairs Forex Trading Signals Today by FxPremiere Telegram Forex Signals FX
More posts by Forex Signals