Gold reaches new record high amid growing concerns about US inflation

Gold reaches new record high amid growing concerns about US inflation

By Sherin Elizabeth Varghese

(Reuters) – Gold prices hit a record high on Wednesday as fears of rising inflation boosted demand for gold as a hedge, with bullion dealers shrugging off doubts over an imminent rate cut US interest rates and a rise in Treasury yields.

Spot gold was up 0.3% at $2,286.24 an ounce, at 0406 GMT, and hit a record high of $2,288.09 earlier in the session. Bullion has reached consecutive record highs since Thursday.

U.S. gold futures gained 1.1% to $2,306.60.

“Gold continues to receive safe-haven flows as Ukraine continues to attack Russian oil infrastructure, to the point where it ignores rising US yields and the prospect of the Fed not cutting rates in June,” said City Index senior analyst Matt Simpson. (United States/) (USD/)

Federal Reserve officials said Tuesday they believe it would be “reasonable” to cut U.S. rates three times this year, even though stronger recent economic data has sowed doubt among investors about that outcome. .

Data this week showed that U.S. manufacturing rebounded unexpectedly as rising commodity prices sparked fears of a resurgence in inflation.

“With commodity prices generally rising, this brings risks of a new round of inflation – so perhaps investors are hedging against inflation,” Simpson said.

Gold, which serves as a hedge against inflation and a safe haven during times of political and economic uncertainty, has gained more than 10.8% so far this year and is expected to see a seventh straight daily gain.

“Right now, gold senses that inflation is more of a driving variable than interest rates and some of that momentum is also being driven by speculators, hedge funds and commodity funds who start buying gold whenever their quantitative systems give them signals,” said the Marex analyst. » said Edward Meir.

Elsewhere, spot silver rose 1.2% to $26.41 an ounce, platinum rose 0.8% to $925.72 and palladium rose 0.6% to $1,009.45.

Gold’s meteoric rise is doing nothing to reignite enthusiasm for platinum jewelry in Asia, analysts say.

(Reporting by Sherin Elizabeth Varghese and Swati Verma in Bangalore; Editing by Sonia Cheema)

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