Gold Price Hits Another Fresh All-Time High Despite Stronger Private Payroll Data Amid Rising Geopolitical Risks
Wednesday, 4/03/2024 17:08
GOLD PRICES are set to reach fresh all-time highs in all major currencies at London's afternoon benchmark auction on Wednesday, while silver surged to a two-year high, despite stronger-than-expected US private payroll data,
writes Atsuko Whitehouse at BullionVault.
Private payrolls rose by 184,000 jobs last month, after being revised upward by 155,000 in February, according to the latest data published by Automatic Data Processing Inc. today.
Spot gold prices in the US Dollar reached a record high of $2288 per ounce overnight. Despite a slight pullback to $2280, this will still mark the fourth consecutive new record on the international benchmark price at 3 pm in London.
Price for silver, primarily an industrial metal that finds nearly 60% of its annual demand from industrial uses, rose to $26.72 per ounce on Wednesday. The grey metal climbed 7% this week to its highest level since February 2022.
“The strong economic data failed to halt gold’s rally,” said Daniel Hynes, Senior Commodity Strategist at ANZ in a latest note, pointing to the better-than-expected US data on
manufacturing and
job openings this week.
Gold priced in
Pounds and Euro meantime reached highs of £1819 and €2124 per ounce respectively earlier in the session, before settling to £1809 and to €2109 at 3 pm. This will be the 5th consecutive high in Pounds and the 9th for Euro based on the price of bullion traded in London - the world's central trading and storage hub for precious metals.
Gold prices on the Shanghai Gold Exchange, meantime, recorded their 6th all-time high in a row of ¥540 per gram today, adding to a 10.2% gain in March.
Despite this strongest monthly gain, it continued to show a
premium to London, the incentive for new bullion imports into the metal’s No.1 consumer market, increasing to $39 per ounce on Wednesday, compared to its historical average of around $8.
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In contrast, global stocks are poised for a third consecutive session of decline. The pan-European Stoxx 600 fell 0.1%, with Wall Street set to open lower.
Odds for a June 2024 rate cut are now down to roughly 58%, from about 70% a week ago, according to the CME derivatives exchange’s
FedWatch tool.
“The US economy is surprising with its strong performance, which would make
a first interest rate cut in June less likely and thus weigh on the gold price,” said Alexander Zumpfe, senior precious metals trader at German refining group Heraeus.
But he added that “it seems as if gold turns every market development into a price increase”.
The Dollar index – a measure of the US currency's value versus its major peers – edged lower on Wednesday from its highest level in over 4 months recorded last session.
Ten-year US Treasury yields, a benchmark rate for government as well as many finance and commercial borrowing, rose to a 4-month high at 4.40% on Wednesday.
"The prospect of interest rate remaining higher for longer was overshadowed by strong safe haven buying amid rising geopolitical risks," Hynes added.
Israeli warplanes bombed Iran’s embassy in Syria on Monday in a strike that Iran said killed two of its generals and five military advisers.
While Iranian Supreme Leader Ayatollah Ali Khamenei vowed revenge, his political adviser, Ali Shamkhani,
said the United States "remains directly responsible whether or not it was aware of the intention to carry out this attack".
The United States warned Tehran on Tuesday against any potential attacks against its forces.
'We will not hesitate to defend our personnel and reiterate our prior warnings to Iran and its proxies, urging them not to take advantage of the situation to resume their attacks on US personnel,' said Deputy US Ambassador to the United Nations,
Robert Wood.
Meanwhile, Russia and Ukraine continued to exchange drone strikes, with Russia targeting energy facilities in Ukraine on Monday night, while Ukraine responded on Tuesday by striking a major Russian oil refinery.
Oil prices continued to rise on Wednesday to its highest level since October, after both future contracts of Brent and US West Texas Intermediate (WTI) crude settled up 1.7% in the last session.
Eurozone inflation fell unexpectedly last month, as consumer price growth in the 20 nations slowed to 2.4% in March from 2.6% a month earlier, according to data from Eurostat, the EU’s statistics agency, published on Wednesday.
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