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Gold steady near record high on safe-haven demand


Spot gold was little changed at $2,355.29 per ounce after reaching a record high of $2,365.09 on Tuesday

Gold prices held steady on Wednesday near a record high hit in the earlier session as a favourable mix of emerging inflationary risks and ongoing geopolitical tensions underpinned the safe-haven metal.

Spot gold was little changed at $2,355.29 per ounce, as of 0719 GMT, after reaching a record high of $2,365.09 on Tuesday. U.S. gold futures advanced 0.5% to $2,373.50.

Gold is diverging from its traditional key drivers because of geopolitical tensions, central banks in emerging markets are stockpiling gold to diversify the risk, some volatility in Chinese currency and the emergence of inflation risk are also driving prices right now, according to ANZ commodity strategist Soni Kumari.

The U.S. CPI report for March due at 1230 GMT is expected to show that the year-on-year CPI increased to 3.4%, while the core CPI is seen slowing to 3.7%, according to a Reuters poll.

If inflation figures comes on the higher side there could be some pushback again for rate-cut expectations, especially since after the strong jobs data the expectation of rate cuts has shifted from June to July, according to Jigar Trivedi, a senior analyst at Reliance Securities.

Markets also await the minutes of the U.S. Fed’s March meeting due at 1800 GMT. The Federal Reserve had held interest rates steady at 5.25%-5.50% range last month, and hinted that they still expect to cut them by 75 bps by end-2024.

Spot silver was flat at $28.15 per ounce, after touching a near three-year high on Tuesday.

Kumari added: We see that silver is going to outperform gold this year, expecting that investment demand which has been a laggard for silver prices is going to turn and you will start seeing prices gaining momentum right now.

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