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Gold prices climbed on Monday, driven by expectations of interest rate cuts by the U.S. Federal Reserve this year, but settled well short of their highs of the day.
Gold is looking increasingly attractive, SP Angel analysts say, driven by a combination of factors including reports that suggest China and other central banks continue to buy gold, recent interest rate moves by the central banks of Japan, Turkey and Taiwan, and expectations for U.S. rate cuts, add that investors also remain concerned about the high level of government debt supported by the U.S. and China.
Gold’s position as an inflation hedge has supported its rally YTD as central banks prepare for interest rate cuts, and residual concerns about lingering inflation should keep the price supported, XTB research director Kathleen Brooks said, according to Dow Jones.
Front-month Comex gold for March delivery (XAUUSD:CUR) closed +0.7% to $2,174.80/oz, its third gain in the past four sessions and fifth highest close in history, off just 0.35% from its 52-week high of $2,182.50 hit March 11.
Meanwhile, silver snapped a five-session losing streak, with the front-month March contract (XAGUSD:CUR) settling +0.2% to $24.745/oz.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SLVP), (SIVR), (SIL), (SILJ)
Gold can easily hit $2,300 or higher in Q2, TD Securities head of commodity strategies Bart Malek believes, saying discretionary traders and ETF investors, who so far have not participated strongly in the rally, come into the market once rate cuts are confirmed.
But on the other hand, stronger economic data could cause a retreat in gold, Melek also said, according to Reuters.
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