Gold prices have surged to a record high, surpassing $2,100, driven by increasing bets for a U.S. interest rate cut in June and safe-haven demand amid the conflict in the Middle East. The rally in gold has been supported by strong physical demand in Asia, central bank purchases, and a robust fundamental backdrop. The Dollar index and US 10 Yields have remained resilient, hovering around 104 and 3.2% respectively.
Federal Reserve Chair Jerome Powell’s upcoming two-day congressional testimony will be closely monitored for insights into the US interest rate path. The likelihood of a rate cut in the June Fed meeting has risen from 40% to approximately 55% in the past month. Gold, often seen as a store of value during times of uncertainty, has climbed over $300 since the Israel-Hamas conflict.
However, the outlook for gold prices will depend on updates regarding a ceasefire and de-escalation of the conflict in the Middle East. Additionally, upcoming US economic data, particularly the labor market data scheduled for this week, could further impact gold prices if reported lower than expectations.
Analysts are closely watching the developments in the commodities market, with gold holding above $2,100 near its record high. The focus remains on Powell’s testimony and the potential impact on the economy, which could influence the trajectory of gold prices in the coming days.
