Gold Continues Bullish Streak for 4 Days: The 'Why' Explained

• Spot Gold Prices Witness a Consecutive Four-Day Rally
• Contrasting Trends in Other Precious Metals
• Recovery of Gold Prices After Recent Plunge
• Factors Influencing the Increase in Gold Prices
• Views of Market Analysts
• Potential Influence of Future Rate Cuts
• Predictions for Future Gold Prices

Spot Gold Prices Witness a Consecutive Four-Day Rally

The price of spot gold experienced a 0.3% increase, reaching $2,043.80 per ounce as of 0615 GMT. This marks the fourth successive day of price growth for the yellow metal. This positive streak peaked on Wednesday when the price of bullion hit a two-week high of $2,055.89. Contrastingly, the US gold futures experienced a decrease by 0.3%, landing at $2,061.20.

Contrasting Trends in Other Precious Metals

Spot silver, on the contrary, witnessed a fall of 0.2%, bringing its value down to $22.88 per ounce. Platinum followed suit, recording a 0.2% drop which brought its price down to $915.73. Palladium also saw a slight decrease, with its value decreasing by 0.1% to $975.56.

Recovery of Gold Prices After Recent Plunge

After experiencing a significant dip in October, the yellow metal's value has been on a steady upward trajectory over the past few months.

Factors Influencing the Increase in Gold Prices

The recent surge in gold prices is primarily attributed to anticipated cuts in interest rates by the Federal Reserve. Despite their resistance to lowering rates in March, the central institution remains optimistic about reaching their 2% target inflation rate.

Views of Market Analysts

Jigar Trivedi, an analyst at Reliance Securities, suggests that the Fed has left room for interest rate cuts, albeit not in March, indirectly supporting gold prices. Following their latest meeting, the Fed decided to leave interest rates unchanged. Traders, however, expect 142 basis points (bps) of Fed rate cuts throughout the year.

Potential Influence of Future Rate Cuts

Fed chair Jerome Powell, when asked about potential rate cuts, responded that it was unlikely that the committee would reach a level of confidence by the time of the March meeting.

Predictions for Future Gold Prices

JPMorgan recently released a report predicting that gold prices may briefly dip before soaring to new peaks. The financial institution forecasts an ongoing surge that could reach the $2300 level by the end of the year. These predictions are based on the impact of rate cuts and falling US real yields on gold's growth.

Edited by Jonathan Stoker