The price of gold hovered around its record high that was hit thanks to growing expectations of US interest rate cuts. Bullion has been on a 16-month rally, surging 30% from the low in late 2022.
Analysts see that as surprising given the surge in government bond yields over the past few years. Total gold demand hit a record last year and is expected to rise again in 2024, according to the WGC.
Fed Chair Jerome Powell said in congressional testimony that continued progress on inflation "is not assured," though the central bank still expects to reduce its benchmark interest rate later this year.
The dollar is expected to maintain its strong momentum in the near term as the Fed’s first rate cut could be postponed until the second half of this year, a Reuters poll showed.
Despite data showing speculators increasing their net long dollar bets to the highest since last November, analysts were somewhat split on how positioning will look over the next three months.
They still saw the greenback weaken against most major currencies over a 12-month period with median forecasts showing barely changed from predictions in the February poll.
Gold smashed through its triple tops around $2,070 in a larger timeframe, a sign of strong upward trend. As long as it holds above that level, the bullish bias will likely remain in place despite possible corrections suggested by RSI.
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