Gold bullion and coins.
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Gold prices continued to rise and rose to another record high on Monday, driven by expectations of US interest rate cuts and the metal's appeal as a safe-haven asset.
Spot gold It rose 0.6% to trade at $2,245.79 an ounce. Gold futures in the United States It rose more than 1% to trade at $2,266.39 an ounce.
“I think it's a really exciting moment for gold,” Joseph Cavatoni, a market strategist at the World Gold Council, told CNBC on Monday. “I think what really drives this is that a lot of speculators in the market really get that confidence and comfort [in] He said the Fed is cutting.
Market watchers expect the US Federal Reserve to cut interest rates in June.
The Federal Reserve's main measure of inflation for February rose 2.8% year-on-year, according to data released on Friday – likely to keep the US central bank on its toes before it can start considering interest rate cuts.
The Federal Reserve remained steady on interest rates at the end of its last meeting in March, but stuck to its forecast of three rate cuts this year.
Gold prices last year
Gold prices tend to share an inverse relationship with interest rates. As interest rates fall, gold becomes more attractive compared to fixed income assets such as bonds, which would generate weaker returns in a low interest rate environment.
Bullion prices also rose due to external demand, according to Caesar Bryan, portfolio manager at investment management firm Gabelli Funds.
“In China, private investors were attracted to gold because the real estate sector was performing poorly,” Brian said, adding that the overall economy in China remained weak and the stock and currency markets were not performing well.
The World Gold Council's Cavatoni said that gold's rise so far has been driven by aggressive purchases by the world's central banks in an attempt to diversify reserve portfolios due to geopolitical risks, domestic inflation and a weak US dollar.
“It's a really strong argument for them to keep buying… [but] “Let's see if it continues to be this big for that long,” he added.
China is the main driver of consumer demand and central bank purchases of gold, according to data from the World Gold Council.
