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Gold futures rallied again for a fourth straight record settlement Wednesday, after Federal Reserve Chair Jerome Powell reiterated the central bank likely will reduce interest rates this year.
Powell said the Fed was not yet ready to cut but likely would find it appropriate “at some point this year.”
Gold’s role as a safe-haven asset also has been helped by Middle East tensions and disruptions to global shipping, China’s economic struggles, and the highly uncertain U.S. presidential election coming later this year.
Bullion (XAUUSD:CUR) touched a record high $2,152.25/oz, while palladium prices soared nearly 10% to $1,053.83/oz and platinum climbed ~3% to $906.70/oz.
Front-month Comex gold for March delivery closed +0.8% to $2,150.30/oz, climbing 5.7% in the past five sessions, while front-month March silver finished +2.1% to $24.272/oz, its best settlement value since December 27.
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Powell’s comments reiterating the Fed is on track to cut rates this year are not indicative of worries from other central banks, Bloomberg’s Simon White said, believing gold’s new highs signal global central banks likely are accumulating the yellow metal in an effort to diversify away from the dollar.
These central banks may feel quite uneasy about owning too many dollars when the U.S. is running persistently large fiscal deficits, which threaten to further erode the dollar’s real value and lead to more inflation, White writes.