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Gold futures hit another record high on Tuesday, extending a streak of gains buoyed by growing geopolitical risk, steady central bank buying and hopes of monetary easing.
Analysts at ING believe Federal Reserve policy is the main driver of the rallywith growing hopes for rate cuts in the US, adding that as a result investors will pay close attention to US consumer price inflation data and Wednesday’s Fed meeting minutes.
“Technical buying momentum will continue in the gold market unless CPI data turns out much warmer than expected,” says Blue Fine Futures strategist Philip Streible, adding that a colder inflation report could lift prices at $2,400 an ounce.
Last week’s stronger-than-expected U.S. jobs market report was expected to dent Fed rate cut hopes, but gold’s rally continued, suggesting market participants are using the setbacks on the gold market mainly as an entry opportunity, according to analysts at Commerzbank.
Comex Gold (XAUUSD:CUR) with delivery closed for April +0.5% to $2,343.50 an ounce, with the front-month contract up 5.7% so far this month and 13.6% year-to-date, while early April silver (XAGYSD:CUR) has finished +0.6% at $27,891/oz, its ninth consecutive gain and best liquidation value since June 14, 2021.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SCHOOL), (BAR), (OUNZ), (SLV), (PSLV), (SLVP), (SIVR), (SIL), (SILJ)
“Gold and silver have broken out in recent days and the moves have been accompanied by call buying,” Alex Kosoglyadov of Nomura Securities told Bloomberg. “SLV call volumes, put/call ratios and upside bias, all measures of relative demand for upside exposure, moved to the most extreme levels in over a year, representative of bullish sentiment.”