New history: Gold surpasses $2300 for first time ever

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.