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The Golden Surge: Market Leans Towards June Rate Cut as Gold Hits New Highs

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Market Sentiment and Analyst Forecasts

Gold prices are on the rise, with experts like Ryan McKay from TD Securities and Phillip Streible from Blue Line Futures predicting further increases. McKay notes that historical patterns suggest room for growth, while Streible echoes the sentiment, stating that gold could surpass previous record levels. This surge in prices coincides with a growing belief that the US is heading for its first interest rate cut since early 2020, with a majority of investors projecting a cut in June following a string of disappointing US economic reports.

Supportive Factors Driving Gold Prices

Besides monetary policy changes, geopolitical tensions such as the upcoming US presidential election, as well as conflicts in Ukraine and Gaza, are contributing to the bullish market for gold. Ole Hansen, the Head of Commodity Strategy at Saxo Bank, highlights how global uncertainties have dampened the appetite for short selling, making gold an attractive option for investors to capitalize on dips in its value.

Investor Activity and Price Milestones

Gold exchange-traded funds are seeing robust buying activity, with SPDR Gold Shares experiencing their first daily inflow in nine trading sessions, as reported by Bloomberg. In London, the gold price benchmark reached a historic high of $2,098.05 per ounce during an afternoon auction, surpassing the previous record set in December. These milestones signify a growing interest in gold as a safe-haven asset amidst economic uncertainties and geopolitical risks.

(With contributions from Bloomberg and Reuters)

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