Gold Price Sets Another 6-Day Run of New Records as 'Geopolitics Drives, Not Data'
Friday, 4/05/2024 16:29
The GOLD PRICE rose to a fresh record at London's bullion benchmarking auction on Friday, fixing just below $2300 per Troy ounce – and marking its 6th all-time high in 6 trading days – as Russia-Nato tensions worsened and Iran vowed revenge for Israel killing 2 of its military commanders.
This week's move, the second
6-day run of new record gold prices in barely a month, came despite new US jobs data beating analyst forecasts amid a raft of 'hawkish' comments on US interest rates from Federal Reserve policymakers.
With physical bullion trading through London then winding down for the weekend, spot gold leapt to $2320, adding almost $90 per Troy ounce from
Easter 2024's record gold price.
Silver prices also leapt again, edging a new 34-month high above $27.34 per Troy ounce – up nearly 15% from this time last month – and setting a fresh all-time record high in terms of the Japanese Yen.
Global stock markets, in contrast, headed for their 4th daily drop of this week, falling back to mid-March levels after the Bureau of Labor Statistics said US non-farm payrolls grew by 303,000 last month, beating analysts' consensus forecasts by more than 1/10th with the strongest expansion since last May.
Betting on where the Federal Reserve will set US interest rates at the end of 2024 jumped back to predict a level of 4.70% per annum, the highest since October when touched on Monday this week and 0.1 points above
the Fed's own 'dot plot' forecast.
"I really don't believe US data matters that much at this point," says precious metals strategist Nicky Shiels at Swiss bullion refining and finance group MKS Pamp.
"The Fed and [other] G10 [economies] are cutting rates this year and while we don't know exactly when, the market knows Global G-10 rates have peaked."
Instead, for the price of gold, "geopolitics is back as a new broader market driving development; it's been dormant for months."
Relations between Russia and Nato "have
now slipped to the level of direct confrontation," said Kremlin spokesman Dmitry Peskov today, claiming that the Western military alliance is "already involved in the conflict surrounding Ukraine [and] continues to move towards our borders and expand its military infrastructure towards our borders", he said.
The theocratic regime in Iran meanwhile marked Al-Quds Day – begun 45 years ago to show "anti-Zionist" solidarity with Palestinian Muslims – by vowing retaliation for the Israeli airstrike on Tehran's embassy in Damascus which killed 13 people on Monday, including 2 generals in the Islamic Revolutionary Guard Corps.
As for US interest rates, "We're not where we need to be," said Philadelphia Fed President Patrick Harker in a speech this week, marking the central position among Fed comments.
"The strong labor market [means] we have time [to wait] before beginning the process of toggling rates down" from the current 2 decade highs, said Richmond Fed President Thomas Barkin.
"Recent readings on both job gains and inflation have come in higher than expected," said Fed chairman Jerome Powell. But "these two months [of data] should not knock us off the path back to target" said Chicago Fed chief Austan Goolsbee.
Former 'dove' Neel Kashkari of the Minneapolis Fed in contrast warned that unless inflation starts to fall again, "that would make me question whether we needed to do [any 2024] rate cuts at all."
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