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Gold hits new record high of $2,354

Gold prices surged to new levels on Monday, contrary to expectations of a dovish Fed. The precious metal reached a new all-time high of $2,354 per ounce during the Asian trading session. The rally in …

Gold prices surged to new levels on Monday, contrary to expectations of a dovish Fed. The precious metal reached a new all-time high of $2,354 per ounce during the Asian trading session.

The rally in gold shows no signs of abating, even as technical indicators flash overbought signals. Spot gold (XAU/USD) was trading at $2,332.54 by 07:10 GMT, shrugging off the idea that the Fed might slow its rate hikes this year.

Friday’s strong nonfarm payrolls report for March suggested the Fed was less likely to cut interest rates soon. This, combined with the dollar’s limited response to the data, gave gold prices room to rise.

A wave of escalating geopolitical tensions has also been driving investors towards gold. The seemingly endless Russia-Ukraine conflict continues to cast a long shadow, with recent strikes near the Zaporizhzhia nuclear plant sparking serious concerns. Meanwhile, anxieties simmer over a potential confrontation between Iran and Israel, despite ongoing peace talks in Egypt providing a glimmer of hope.

With a sparse economic calendar today and Tuesday, market participants will closely monitor the U.S. CPI report on Wednesday, which could dictate gold’s next move.

Forecasts

UBS expects gold to trade at $ 2,300 an ounce in June and at $ 2,500 by the end of 2024.


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