Gold price continues to gain momentum, nearing $2,182 and adding 0.22% on the day. The recent rise in gold price is attributed to various factors, including the strong US Nonfarm Payrolls report showing a gain of 275K jobs in February, despite the unemployment rate increasing to 3.9%. In addition, signals of rising domestic demand in China’s economy have also contributed to the uptrend in the gold price.
One key factor supporting the rise in gold price is the expectation that the Federal Reserve may cut interest rates this year. Federal Reserve Chair Jerome Powell indicated during a recent testimony that the US economy is healthy, leading to speculation of potential rate cuts. Futures markets are pricing in a high probability of rate cuts by mid-June, further supporting the rally in gold prices.
The ongoing geopolitical tensions and uncertainties in the global economy are also boosting safe-haven demand for gold. The recent data from China, showing an increase in Consumer Price Index (CPI) but a decrease in Producer Price Index (PPI), has heightened concerns about global economic growth, driving investors towards safe-haven assets like gold.
Looking ahead, gold traders will be closely watching the US CPI and Retail Sales figures for February for further direction. Expectations are for an increase in CPI and Retail Sales, which could influence the movement of gold prices in the coming days. Overall, the outlook for gold remains positive as investors seek safe-haven assets amid economic uncertainties and potential rate cuts by the Federal Reserve.
