Gold bulls on stampede as prices hover near record highs

Precious metal continues upward charge despite mixed economic signals.

Gold bulls on stampede as prices hover near record highs

Gold prices on Tuesday clung to record-breaking levels, as the yellow metal refused to relinquish its bullish momentum. Spot gold (XAU/USD) traded unchanged at $2,253.74 per ounce, just shy of Monday's all-time high of $2,265.

The gold rush intensified this week even as an unexpected expansion in U.S. manufacturing activity cooled rate cut expectations. The ISM manufacturing PMI rose to 50.3 in March from 47.8, surpassing the key 50 level that signals growth for the first time since September 2022.

Federal Reserve Chair Jerome Powell indicated on Friday that the latest U.S. inflation data did not undermine the central bank's outlook. However, he noted the economy's strong footing means "we don't need to be in a hurry to cut" rates.

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However, the core PCE price index, the Fed's preferred inflation gauge, slowed more than anticipated in February, potentially an "aberration from the recent deflation trend" that could revive rate cut bets.

Geopolitical risks also burnished gold's safe-haven appeal, with reports of Israeli airstrikes near Iran's embassy in Damascus ratcheting up Middle East tensions.

With the pivotal U.S. nonfarm payrolls report looming on Friday, traders remain on high alert for any catalyst that could knock gold off its perch or propel it to new highs.

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