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Gold futures gained on Friday to cap a fifth straight weekly rise, the metal’s longest winning streak since January 2023, even as dollar and bond yields rose as expectations for rate cuts in 2024 receded.
“It it is increasingly clear that normal reaction functions have been abandoned with gold,” said Ole Hansen of Saxo Bank.
Gold’s 16% year-to-date rally has been driven, according to Hansen, by a combination of geopolitical risks related to the Middle East and the war in Ukraine, strong retail demand in China, central bank demand, increase in the debt/GDP ratio among the major economies and the 16% increase in gold since the beginning of the year. a potential recovery in inflation.
First-month Comex gold (XAUUSD:CUR) for April delivery is closed +1.8% for the week at $2,398.40 an ounce, including Friday’s 0.7% gain, and first-month April Comex silver (XAGUSD:CUR) ended +1.9% to $28,808/oz, up 1.7% on Friday.
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“The escalation and detente situation in the Middle East has taken hold in the markets,” says David Meger of High Ridge Futures, adding that gold would retreat if the situation actually eases, but in the long term, the “higher uptrend gold will continue as the Federal Reserve may not cut rates as soon as the market expected.”