MARKET COMMENTARY – Gold prices hit fresh record peak on April 4, up 12 percent so far in 2024

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By David Brough 

LONDON – Gold prices hit a fresh record peak on April 4, 2024, underpinned by global geopolitical tensions and nagging fears over inflationary pressures, while expectations remain for falls in U.S. interest rates later this year. 

Bullion touched a record high of USD $2,305.04 per ounce on Thursday April 4, up 12 percent so far this year. Bullion’s price rises are the latest in a series of all-time highs, against a backdrop of rising commodity prices.

The reasons for the surging gold prices are linked to the precious metal’s safe-haven appeal during the present geopolitical turmoil, its attraction as a store of value, and widely held expectations of interest rate cuts to come in the United States later this year. Lower interest rates reduce the opportunity cost of holding non-yielding bullion. 

The latest U.S. manufacturing data indicating a resilient economy, had tempered slightly the likelihood of a June interest rate cut by the U.S. Federal Reserve (central bank), and had contributed to a mild pullback in gold prices from peaks touched on April 2, but the market rallied again on April 3 and April 4, supported by worries over U.S. inflationary pressures. 

Persistent high gold prices may drag on bullion imports into major consuming and jewellery manufacturing countries, such as India and Turkey.

High volatility in gold prices can complicate sourcing decisions for jewellers. Strong gold prices may lead some jewellers and manufacturers to offer jewellery featuring lower purities of the precious metal, such as 9-carat gold jewellery, or may boost offerings of more affordable silver jewellery.

MARKET COMMENTARY – Gold prices hit fresh record peak on April 4, up 12 percent so far in 2024

Picture credit: PureJewels