The Federal Reserve could cease raising interest rates earlier than expected, according to softer-than-expected U.S. inflation data. Which led to higher gold prices in Asian trading on Thursday. Growing recessionary fears also encouraged safe-haven buying.
This week, the price of the yellow metal rose past $2,000, and it is now just $50 short of a record high for 2020. Gold’s most recent advance was spark by weaker-than-anticipated the United States consumer inflation data as markets started pricing in the prospect that the Fed could stop raising interest rates as early as June.
The Fed’s March proceedings revealed that decision-makers were thinking about pausing rate increases.
However, they were also concerned about a “mild recession” later this year as a result of the banking crisis and the slowing of economic development brought on by rising interest rates.
Yellow Metal Shines on Recession fears
Gold futures increased by 0.80% to $2041.20 per ounce by 17:10 IST. While spot gold increased by 0.62 % to $2,027.37 per ounce. Both instruments were set benefit for the third straight day.
When many U.S. banks failed in March, speculators raced into conventional safe haven assets. Which led to a month-long run in gold.
Although worries about a coming banking catastrophe have since diminished, the price of gold has held steady despite worries that the United States economy would contract this year. These worries were reinforced by the Fed minutes.
The dollar is weakening, U.S. Treasury yields are falling. And there are indications that the economy is getting worse, all of which are expect to help gold prices. Following Wednesday’s inflation reading, the dollar dropped & was trading closely to a 2-month down.
After making significant gains this week. The remaining valuable metals were split on Thursday. Silver futures increased 1.04 % to $25.723 per ounce.
Copper prices among industrial metals were unchange as the likelihood of a recession offset encouraging signs from a declining currency and a likely halt to interest rate increases.
Futures for copper remained stable at $4.099 per pound.
For additional hints about the greatest copper importer in the world, attention is now of Chinese trade statistics, There are worries that China’s economic recovery would be sluggish this year as a result of a string of weaker-than-expected indicators from that country.