Gold rises to new record high as market awaits US inflation data

(MENAFN) Gold prices surged to unprecedented levels, surpassing USD2,500 per ounce and peaking at USD2,508 during trading. This remarkable rise follows a period of short-term profit-taking, where gold had dipped slightly before bouncing back with a gain of over 1 percent in the previous session. Tim Waterer, the chief market analyst at KCM Trade, noted that while gold experienced a brief pullback due to profit-taking, it started the week on a strong note. He emphasized that gold prices stand to benefit significantly if upcoming U.S. inflation data shows a lower-than-expected increase. Such an outcome could fuel market expectations of a sharp interest rate cut by the Federal Reserve in September, potentially pushing gold prices even higher.

The market's attention is particularly focused on the possibility of a 50 basis point rate cut, which could provide additional momentum for gold to maintain its record-setting pace. Waterer highlighted that increased optimism about such a rate cut could see gold prices solidify their position above the USD2,500 mark. This scenario reflects the broader market sentiment, where gold is often viewed as a safe-haven asset, especially in a low-interest-rate environment. As investors weigh the implications of the U.S. inflation data, gold continues to be a focal point for those looking to hedge against economic uncertainty and potential shifts in monetary policy.

In contrast, other precious metals experienced declines. Spot silver fell by 1.2 percent to USD27.67 per ounce, platinum dropped 0.3 percent to USD933.96 per ounce, and palladium saw a decrease of 0.6 percent, settling at USD914.25 per ounce. These declines suggest a divergence in market sentiment, with gold emerging as the primary beneficiary of current economic conditions, while other metals face downward pressure. The performance of these metals further underscores the unique role gold plays as both a barometer of market confidence and a refuge in times of potential economic shifts. 

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