Gold prices extended their record highs on Wednesday as concerns about inflationary pressures boosted demand for the yellow metal as a hedge, while traders shrugged off doubts about an imminent U.S. interest rate cut and higher Treasury yields.
Price change
Spot gold was up 0.2 percent at $2,283.76 per ounce by 0602 GMT, after hitting a record high of $2,288.09 earlier in the session. The precious metal has hit consecutive records since Thursday.
U.S. gold futures rose 1 percent to $2,304.20.
“Gold continues to receive safe-haven flows as Ukraine continues to attack Russia’s oil infrastructure, to the point that it is ignoring rising US Treasury yields and the possibility that the Federal Reserve will not cut interest rates in June,” said Matt Simpson, chief analyst at City Index.
Federal Reserve policymakers said Tuesday they believe it would be reasonable to cut U.S. interest rates three times this year, although the latest strong economic data has raised investor doubts about that outcome.
Data this week showed that the US manufacturing sector rebounded unexpectedly, as rising raw material prices raised concerns about the possibility of a return to inflation.
With commodity prices generally higher, it brings the risk of another round of inflation, so investors may be hedging against inflation, Simpson said.
Gold, used as a hedge against inflation and a safe haven during times of political and economic uncertainty, has risen more than 10.8 percent so far this year and is set to rise for a seventh straight day.
As for other precious metals, silver rose in spot transactions by 1% to $26.36 per ounce, platinum rose by 0.9% to $926.80 and palladium by 0.8% to $1011.62 per ounce.
