Gold scales fresh record highs above $2350 an ounce

Gold prices rose in European trade on Tuesday for the third straight session, hitting a record high above $2350 as US treasury yields slowed down. 

Now markets await important US inflation data in addition to the Federal Reserve’s last meeting’s minutes to look for fresh clues on the future of interest rates. 

Gold is steadily approaching the psychological level of $2400 amid strong investment demand by global central banks and investment funds. 

Prices 

Gold prices rose 0.75% today to $2356 an ounce, a record high, with a session-low at $2336. 

Gold prices rose 0.4% on Monday, the second profit in a row, marking a fresh record high on strong haven demand.

Haven Demand 

Massive investments are pouring into gold as investors seek safe havens amid mounting Middle East tensions.

Israel this week announced the withdrawal of some of its troops from southern Gaza to redeploy them in preparations for the Rafah ground attack. 

At the same time, the Islamic Republic of Iran is preparing for a counterattack against Israel after the latter's alleged attack on the Iranian consulate in Syria. 

US Yields

US 10-year treasury yields declined today by over 0.5% away from recent five-month highs at 4.462%, underpinning non-yielding assets. 

US Rates 

Following excellent US labor data last week, the odds of a Fed interest rate cut at the June policy meeting tumbled from 60% to 48%. 

Now traders expect two interest rate cuts totaling 50 basis points overall this week, down from 75 basis points in previous forecasts. 

Now investors await crucial US inflation data later this week, which could change the odds of future policy moves by the Fed. 

Gold Performance Projections

JPMorgan's analysts foresee gold prices hitting $2500 an ounce this year.

Goldman Sachs' analysts project a minimum price target of $2300 an ounce for this year, anticipating policy easing by the Federal Reserve.

The SPDR

Gold holdings at the SPDR Gold Trust rose 1.44 tonnes yesterday to a total of 827.85 tonnes.