Spot gold gained 1% to $2,438.41 per ounce after hitting a record high of $2,449.89 earlier in the session
Gold prices hit a record high on Monday as recent economic data boosted bets for interest rate cuts by the U.S. Federal Reserve, while silver followed suit and soared to a more than 11-year high.
Spot gold gained 1% to $2,438.41 per ounce, as of 0852 GMT, after touching a record high of $2,449.89 earlier in the session. U.S. gold futures added 1% to $2,442.50.
Gold’s rise to new all-time highs was likely fuelled by restored bets for Fed rate reductions, following last week’s cooling U.S. inflation data. It may also be benefiting from the spillover of the surge in the broader metals complex, according to Han Tan, chief market analyst at Exinity Group.
Data showed that U.S. consumer prices rose less than expected in April, suggesting that inflation resumed its downward trend in a boost to expectations for a September interest rate cut.
Lower rates reduce the opportunity cost of holding non-yielding bullion, which also benefits from uncertainty in the market.
Gold’s spike to a fresh record high is less likely due to growing safe-haven demand, despite the headlines out of Iran. Most traditional safe havens are little changed so far today, Tan said.
Meanwhile, a key consumer of gold and other industrial metals, China announced on Friday “historic” steps to stabilise its crisis-hit property sector.
Spot silver added 1.2% to $31.86 after reaching an over 11-year high.
On silver, its dual characteristics as industrial and precious is finally getting more attention. Transition to clean energy should continue to see a greater role in the use of silver, analysts at OCBC wrote in a note.
