Gold, Silver Prices Shinier Then Ever; Why Pristine Metals Are Rising, And Where Are They Headed?

Amidst rising economic uncertainty and shifting monetary policy, gold soared to a new peak above $2,300 per ounce, fuelled by expectations of interest rate cuts by the Federal Reserve and sustained demand from central banks.

The precious yellow metal surged to $2,304.96 an ounce, hitting a new record high, before steadying its momentum as investors digested remarks from US Fed Chair Jerome Powell. Powell's indication that it may be appropriate to begin lowering borrowing costs "at some point this year" provided reassurance to markets, particularly to those eyeing gold as a safe-haven asset.

Since mid-February, gold has been on an ascent, setting record highs every day this week. This surge is fueled by investor anticipation that gold stands to gain from the imminent policy shift by the US Fed. Additionally, heightened geopolitical tensions in regions like the Middle East and Ukraine have contributed to the metal's appeal, alongside consistent purchases by central banks.

According to the latest data from the World Gold Council, central banks have been steadily increasing their gold reserves, with February marking the ninth consecutive month of accumulation. China emerged as a dominant purchaser, with India and Kazakhstan also actively participating in bolstering their gold holdings.

Check Current Gold Rate In India Here.

As of 9:12 am in Singapore, spot gold maintained its strength at $2,299.25 an ounce, following a seven-day rally. However, the sustained advance pushed the metal's 14-day relative strength index to close to 83, well beyond the threshold of 70, which some investors interpret as a sign of overvaluation.

"Gold and silver prices extended their strong show in international markets as the yellow bullion hit another record high to close above $2,300 per ounce , while silver prices hit a two-year high of $27.00. Safe-haven demand for both metals continued amid geopolitical tensions in the Middle East, while bullish charts are also pushing the technical traders to the long side of the two precious metals," stated Rahul Kalantri, VP Commodities of Mehta Equities Ltd.

Khatri further added, "Buoyancy in gold prices was seen as the Fed chairman in his speech stated that policy rates are at the peak for this cycle. Euro-zone inflation also cooled off in March to 2.4% against 2.8% in February. An earthquake in the Taiwan and geo-political tensions in the middle-east also supported safe-haven demand of precious metals."

Giving technical views on the yellow metal, Khatri stated, "Gold has support at $2282-2264 while resistance at $2322-2340. Silver has support at $26.90-26.72 while resistance is at $27.42-27.60. In INR gold has support at Rs69,740-69,540, while resistance at Rs 70,380, 70,620. Silver has support at Rs78,440-77,880, while resistance at Rs79,840, 80,580."

Silver, meanwhile, hovered near its highest level in nearly three years, reaching $27.3355 an ounce for immediate delivery. Palladium and platinum also experienced slight gains, while the Bloomberg Dollar Spot Index stabilized after a brief two-day decline.

Investor attention now turns to the anticipated nonfarm payroll data scheduled for release on Friday. Analysts will scrutinize the figures for insights into the health of the US economy and potential implications for monetary policy. Expectations are high for strong employment gains, as indicated by a Bloomberg survey.

*Inputs from Bloomberg*