Hopes of US rate cuts alone are unlikely to have driven latest leg higher, say strategists
The price of gold has surged 7 per cent in just over a week to hit record highs, leaving longtime market watchers struggling to explain what has been one of the yellow metal’s most curious rallies.
The sudden price move has lifted the haven asset above its previous peak reached in December to hit nearly $2,195 per troy ounce on Friday, according to LSEG data. Some commentators have attributed the move to growing expectations of US interest rate cuts, which would make the non-yielding asset relatively more attractive.
But several analysts say none of the factors that have driven gold’s bull run over the past 16 months are the likely catalyst for this recent rally. Those include record levels of central bank buying, Chinese households looking for havens for their money or the war in Ukraine and the Middle East.
“It has been the quietest, most confusing rally,” said Nicky Shiels, precious metals analyst at MKS Pamp, a Swiss gold refinery and trading house. “What took it from $2,000 [last month] to above $2,150 is the head-scratching part.”
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