Gold nearing record high
BY MINING.COM AND REUTERS Gold extended gains to above $2,000 an ounce in early April as the dollar and yields fell, while weaker US economic data emboldened bets for slower rate hikes despite mounting concerns over oil-led inflation. Spot gold rose 1.9 percent to $2,021.65 per ounce April 4, reaching its highest level in a year. The pre- cious metal is now roughly $50 away from trading at an all-time high. US gold futures also gained 1.9 percent to $2,038.80 per ounce. “We’re in this very positive back - drop for gold in which we have the slowing of economic data along with inflationary pressures remaining ele - vated,” said David Meger, director of metals trading at High Ridge Futures, in a Reuters note.
Burnishing gold’s appeal, especial- ly amongst traders holding other cur- rencies, the dollar added to its losses after data showed US job openings in February dropped to a near two-year low, while factory orders also dipped. Analysts at Citi are forecasting gold prices to remain strong in the short- term with an upside of $2,300 on the back of several macro drivers, includ- ing deflationary pressures and in - creased likelihood of a recession. Commodity research consultants at CPM Group recently predicted that gold demand will stay elevated due to the economic conditions reminiscent of the outset of a recession. “Our ex - pectation is that a recession will likely occur in 2024,“ said CPM managing partner Jeffrey Christian in a webcast. A surge in oil prices this week af- ter a surprise output cut by OPEC+
has helped bullion shake off the usual pressure from the likelihood of in- terest rate hikes that could be imple- mented to combat inflation. “From a technical perspective, the gold price is likely to remain strong and stabilize at its current level or even higher. The $2,050 mark could act as an important resistance level, and if breached, prices could quickly soar towards its all-time high,” said Alexander Zumpfe, a precious metals dealer at Heraeus. Markets now see about a 40 per- cent chance of the Federal Reserve hiking rates by a quarter basis point in May, with a roughly 60 percent chance of a pause. But Han Tan, chief market analyst at Exinity, said more rate hikes could cause gold to unwind some of its re- cent gains.
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The Alaska Miner
Spring 2023
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