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Gold eyes record highs as inflation, geopolitics collide

Gold prices clung to near-record levels on Wednesday, buoyed by a combination of rising inflation fears and simmering geopolitical tensions. The precious metal hovered around $2,359.39 per ounce as of early Wednesday morning (06:25 GMT), …

Gold prices clung to near-record levels on Wednesday, buoyed by a combination of rising inflation fears and simmering geopolitical tensions.

The precious metal hovered around $2,359.39 per ounce as of early Wednesday morning (06:25 GMT), little changed from the previous session’s record high.

Notably, gold is currently being driven by factors beyond its usual influences. Geopolitical jitters are prompting emerging market central banks to diversify their reserves by stockpiling gold, while fluctuations in the Chinese yuan and the emergence of inflation are adding further fuel to the price rally.

US inflation data in focus as markets eye Fed rate cuts
Traders await key US inflation data to gauge the Federal Reserve’s monetary policy outlook.

Later today, key economic data releases from the United States will be closely watched. The U.S. consumer price index (CPI) report for March, due at 12:30 GMT, is expected to show inflation rising to 3.4% year-on-year.

The Fed’s monetary policy stance will also be in focus, with the release of the minutes from their March meeting scheduled for 18:00 GMT.

While the Fed signalled its intention to cut rates by 75 basis points by year-end, a surprisingly strong jobs report last week has cast doubt on this prospect. Higher interest rates typically reduce the appeal of non-yielding assets like gold.


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