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HomeGoldGold Hits Record Highs Above $2,350 Despite Waning Rate Cut Expectations
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Gold Hits Record Highs Above $2,350 Despite Waning Rate Cut Expectations

Gold prices soared to unprecedented levels during Asian trading on Monday, defying the diminishing expectations of U.S. interest rate cuts as demand for the precious metal as a safe haven remained robust, with investors eagerly awaiting further indicators regarding the U.S. economy.

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Even as technical indicators signaled that gold was firmly situated in overbought territory, typically suggesting limited room for further growth, the rally in gold persisted. Spot gold surged by as much as 0.7% on Monday, reaching a historic peak of $2,353.81 per ounce, while gold futures expiring in June also climbed by 0.8% to a record high of $2,372.45 per ounce.

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The surge in gold prices comes amid subdued expectations of rate cuts following a resoundingly positive nonfarm payrolls report for March. Despite the robust condition of the U.S. labor market, the dollar exhibited little strength in response to the report, providing additional momentum for gold’s upward trajectory. Uncertainty surrounding U.S. interest rates loomed as traders await crucial consumer price index inflation data scheduled for release on Wednesday.

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According to the CME Fedwatch tool, traders have significantly reduced bets on the Federal Reserve implementing rate cuts as early as June.

While global geopolitical tensions persist, particularly with the ongoing conflict between Russia and Ukraine, gold continues to benefit from its safe haven status. Concerns over potential conflicts, such as between Iran and Israel, also contribute to the sustained demand for gold.

In addition to gold, other precious metals saw gains on Monday, with platinum futures rising by 0.1% to $941.70 per ounce, and silver futures increasing by 1.7% to $27.965 per ounce.

However, copper prices experienced a slight decline after reaching 15-month highs last week, with mild profit-taking observed in Monday’s trading. Three-month copper futures on the London Metal Exchange fell by 0.2% to $9,333.50 per ton, while one-month U.S. copper futures dropped by 0.3% to $4.2287 per pound.

The surge in copper prices had been supported by positive economic indicators from China, a major importer, signaling an uptick in business activity. Additionally, the possibility of tighter refined copper supplies contributed to the price boost following indications of potential production cuts by leading Chinese refiners.

Further economic data from China is anticipated later in the week, including inflation and trade figures for March, which may provide additional insights into market trends and dynamics.

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