Forecasts that central banks of developed countries will soon start to cut policy rates, which have been at historically high levels for some time, in order to fight inflation continue to have an impact on asset prices.
In the pricing in the money markets, it is predicted that the Fed will start interest rate cuts in June with a probability of 64 percent, the European Central Bank (ECB) 98 percent and the Bank of England (BoE) 80 percent.
Analysts stated that although the US 10-year bond interest rate rose to the highest level since November 2023 with 4.43 percent yesterday, it was balanced at 4.35 percent with the effect of increased purchases from these levels, while the ounce price of gold broke a record at $ 2,304. As of 14.40, the ounce price of gold is trading at $ 2,293, 0.3 percent below the previous close.
Analysts noted that Fed Chairman Jerome Powell’s statement yesterday that the Fed should start lowering policy interest rates this year supported the gold ounce price upwards, emphasizing that low interest rates reduce the opportunity cost of holding gold that does not generate continuous income.
Up 9.3 percent in March
While the ounce price of gold has been on an upward trend since March, renewing records every day this week, it rose 9.3 percent in March, making its biggest monthly increase since July 2020.
Analysts noted that the ounce price of gold is calculated to benefit from the purchases of central banks, especially China and India, and the Fed’s upcoming interest rate cuts, noting that the price of the precious metal also received additional support from geopolitical tensions such as the Middle East and Ukraine.
The price of silver also rose to $ 27.23 an ounce, reaching its highest level since June 2021.
