Gold prices surged on Friday, reaching a fresh all-time high, as various factors such as expectations of a US interest rate cut, speculative buying, and central bank acquisitions sustained the precious metal’s ongoing rally, despite robust job growth in the United States during March.
At 2:03 p.m. EDT (1803 GMT), spot gold XAU= rose by 1.5 percent to $2,324.15 per ounce, following a peak of $2,330.06 earlier in the day. This week, bullion climbed over 4 percent and marked its third consecutive weekly increase.
US gold futures also saw a 1.6 percent uptick, settling at $2,345.4, according to Gulf Business.
Phillip Streible, chief market strategist at Blue Line Futures in Chicago, noted the influx of capital into the market, coupled with strong central bank purchases and speculative trading, as key drivers propelling gold prices.
Meanwhile, the Labor Department’s employment report revealed a surge of 303,000 jobs in the nonfarm sector last month, surpassing economists’ expectations of 200,000 jobs, with estimates ranging from 150,000 to 250,000.
Federal Reserve Chair Jerome Powell reiterated on Wednesday the central bank’s stance of not rushing to lower borrowing costs, maintaining the current policy rate range of 5.25 percent to 5.50 percent.
David Meger, director of metals trading at High Ridge Futures, highlighted the persistent inflation concerns as a supportive factor for the gold market later in the year.
Traders are currently factoring in a roughly 59 percent likelihood of a rate cut by the Fed in June, with lower interest rates diminishing the opportunity cost of holding gold.
Bart Melek, head of commodity strategies at TD Securities, suggested that some investors may have covered short positions, while technical factors led gold to breach the $2,300 resistance level.
In the precious metals market, spot silver XAG= climbed by 1.6 percent to $27.37 per ounce, while platinum XPT= saw a 0.4 percent increase to $928.80, both recording weekly gains.
However, palladium XPD= experienced a 2.2 percent decline to $999.00, posting a weekly decrease.
