AP | 05 Mar, 2024
Gold scaled a record high moving further above $2,100 in a rally
sparked by growing bets for a US interest rate cut in June and on
safe-haven demand due to the conflict in the Middle East, says Manav
Modi, Analyst, Commodity and Currency, Motilal Oswal Financial Services.
A wider robust fundamental backdrop added support, including strong physical demand in Asia and central bank purchases, he said.
Gold,
which is looked as a store of value during times of political and
financial uncertainty, has climbed by over $300 since the Israel-Hamas
war. However, updates regarding ceasefire and an ease off in the war
will be important to keep an eye on. US Services PMI and factors data
were reported lower than expectations. After a series of weaker economic
data last week, focus now shifts to US labour market data scheduled
this week, which if reported lower than expectations could further
increase gains for bullions, he said.
Jateen Trivedi, VP Research
Analyst, LKP Securities, said gold prices experienced an uptick driven
by growing speculation that the US Federal Reserve will cut interest
rates in June. This rise was fueled by signs of slowing industrial and
construction spending in the United States, coupled with a decrease in
inflationary pressures.
Additionally, heightened geopolitical
tensions globally have dampened the appetite for short-selling, thereby
bolstering gold's attractiveness as a buy-on-dip asset, he said.
Market
sentiment, as reflected in the CME Fed Watch Tool, currently indicates a
71 per cent expectation for a Fed interest rate cut in June. With this
backdrop, gold prices appear poised to reach the 65000 levels before the
end of March, he said.
