Gold prices declined in European trade on Thursday for the first time in eight days off record highs on active profit-taking.

Gold surpassed $2300 for the first time ever, following bearish remarks by Fed Chair Jerome Powell’s which boosted the odds of a US interest rate cut in June. 

Now investors await important US data later today in addition to remarks by several Fed officials to gauge the path forward for monetary policies.

 Prices

Gold prices scaled a record high $2304 an ounce today before dropping 0.4% to $2291. 

Gold prices rose 0.9% on Wednesday, the seventh profit in a row as both the dollar and US treasury yields lost ground. 

 The gains were also underpinned by strong demand by investment funds worldwide. 

Powell

Fed Chair Jerome Powell said in his speech at Stanford University that most participants in the Federal Open Market Committee see it appropriate to start cutting interest rates sometime this year.

Powell said that recent inflation and employment data didn’t change the outlook for monetary policy. 

He said that if the economy developed widely as expected, it would be appropriate to start cutting interest rates this year. 

Bearish Fed Remarks

San Francisco Fed President Mary Dale, and Cleveland Fed President Loretta Mister, both said that the Fed will likely cut interest rates three times this year.

US Rates

Following their remarks, the odds of a June Fed interest rate cut rallied from 57% to 63%. 

Fresh Pricing

Now investors await important US unemployment claims and monthly jobs data this week, which will help determine the likely path ahead for policies. 

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 1.73 tonnes yesterday to a total of 830.73 tonnes, the highest since March 25. 

Swiss franc tumbled in European trade against a basket of major rivals, resuming losses against the dollar and hitting a five-month trough at 0.91 franc per dollar.

The decline came after official Swiss inflation data showed prices hit 33-month lows, which proves the Swiss National Bank has won its battle against inflation. 

It also opens the door for more Swiss interest rate cuts this year, following the surprise cut in March by 25 basis points.

 Prices 

The USD-CHF pair rose 0.5% to 0.9074, with a session-low at 0.9022, after closing up 0.6% on Wednesday away from a five-month low at 0.9095 franc per dollar. 

Swiss Inflation

Earlier data showed Swiss consumer prices rose 1% y/y in March, the lowest rate since September 2021, and below estimates of 1.3%.

On a monthly basis, consumer prices were flat last month, below estimates of a 0.3% increase.

The SNB 

The data showcases the success of the Swiss National Bank’s measures to curtail inflation, and will likely lead to further interest rate cuts this year. 

The Swiss National Bank surprised the markets today with a 0.25% interest rate cut to 1.5%, while most analysts expected no change in policies. 

The decision comes as Swiss inflation hit 1.2% in February, the ninth month in a row of sub 2% inflation rates. 

The SNB said that cutting rates has become possible as efforts to combat inflation in the 2-⅕ years beared fruit. 

Thomas Gordon 

SNB Governor Thomas Gordon said it’s likely that inflation will remain at target levels in the next few years.

He said that measures taken to control inflation have proven effective, with the central bank open to change policies once more if needed. 

Swiss Rate Prospects 

Following the inflation data, the odds of an SNB interest rate cut at the June meeting surged to above 90%. 

Nickel prices rallied on Wednesday as the dollar lost ground against most major rivals, while analysts assess the state of supplies.

A delay in the release of smelters data stoked concerns of tightened supplies, which underpinned prices in recent months. 

Nickel is mainly used in stainless steel production and EV batteries, and has long suffered from an oversupply status, but officials at Vale expect the market to swing to deficits by 2028. 

Fed Chair Jerome Powell said in a San Francisco conference that policymakers shouldn’t rush into interest rate cuts, especially as the US economic performance proves resilient, while inflation remains above 2%.

San Francisco Fed President Mary Dale, and Cleveland Fed President Loretta Mister, both said that the Fed will likely cut interest rates three times this year.

Later this week, the US government will report the crucial payrolls report for March. 

Otherwise, the dollar index fell 0.5% to 104.3 as of 16:00 GMT, with a session-high at 104.8, and a low at 104.2.

On trading, nickel spot prices rose 2.7% as of 16:12 GMT to $16.9 thousand a tonne. 

Global oil prices rose in European trade on Wednesday on track for the fifth profit in a row, scaling a six-week high as Brent approaches $90 due to concerns about global supply disruptions.

The OPEC+ technical meeting wrapped up today without changes in production policies, with traders now awaiting official US inventory data from the EIA later today, after initial data showed a larger than expected drawdown.

Prices 

US crude rose 0.85% to $86.06 a barrel, the highest since October 2023, while Brent rose 0.8% to $89.84 a barrel, the highest since October 2023 as well. 

US crude rose 1.75% on Tuesday, while Brent added 1.8%, the fourth profit in a row amid growing geopolitical concerns. 

Global Supplies

Ukraine continued its drone attacks against Russian energy infrastructure, after hitting Russia’s third largest oil refinery this week.

Iran on the other hand vowed to respond to Israel after accusing it of launching airstrikes against its consulate in Damascus, killing seven Iranian officials. 

The increasing tensions between Israel and Iran have stoked concerns once more about a potential widespread conflict in the Middle East that could disrupt supplies.

US Stocks

Initial data from the American Petroleum Institute showed US crude stocks fell by 2.3 million barrels in the week ending March 29, passing estimates of 0.5 million drop. 

It’s the third weekly drop in a month, which is a positive sign for demand in the US.

Now traders await official EIA data today, expected to show an inventory drawdown of 0.3 million barrels. 

Oil Supply Deficit Projections 

Bank of America is projecting a global oil supply deficit of 450 thousand bpd in the second and third quarters as global GDP growth rebounds.