Key points:
- Gold blasts off to new record high.
- Inflation narrative driving the rally.
- Silver hits an 11-year high of $32.
Gold bugs anticipate the upcoming rate cuts to increase the appeal of holding precious metals.
- Gold prices
XAUUSD rocketed to a fresh all-time high early Monday during the Asian session. Fueling the upside swing is investors’ conviction that the Federal Reserve will make its first interest rate cut following months of building up expectations. Silver enjoyed tailwinds, too — the metal hit a high last seen in 2013, topping $32, but still ways away from its 2011 record of $49.78. - Gold rose to a record of $2,445 per ounce earlier this morning, on track to wrap up a second straight day of gains. More importantly, the safe-haven commodity broke its previous record high of $2,430 made on April 12. Gold bugs have been among the biggest winners so far this year with their favorite asset adding roughly 20% to its price since the start of January.
- Declining inflation figures are shaking up the investment landscape and pushing gold higher. Why is that? Gold is a non-yielding asset, meaning that it doesn’t generate fixed income like the US dollar — when you have a deposit in dollars, you earn yield, which is tied to the benchmark interest rate. When this rate drops, investors may choose to dump dollars and pursue more lucrative yet risky bets.
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