Gold News

Gold Price Retests $2400 Record High, 'Unhurt' by Fed Rates on Geopolitical Bid

UPDATE 17:30 London: Fresh Dollar weakness saw gold jump into Friday afternoon's physical benchmark pricing in London, fixing back at the record high set 6 weeks ago at $2400 per Troy ounce at 3pm before rising further in spot-market trade.
 
Bullion in terms of the Euro and British Pound also rose sharply, but fixed 2.0% and 1.2% respectively below 12th April's all-time record high gold prices, coming in at €2209 and £1892.
 
Silver prices also leapt, jumping through $30 per Troy ounce for the first time since February 2013 after Kyiv said Russian forces have advanced 10km closer to Ukraine's 2nd city, Kharkiv.
 
Read Friday's earlier London Gold Market Report below.
 
GOLD PRICES rose in all major currencies Friday, adding 0.5% for the week against a falling US Dollar as Russia continued its latest assault on Ukrainian city Kharkiv, foreign aid began reaching refugees from Israel's war in Gaza, and comments from Federal Reserve policymakers jarred with growing signs of a slowdown in the world's largest economy.
 
China and Japan's stock markets ended the day higher but Western equities slipped after New York's Dow Jones Industrial Average yesterday peaked above the 40,000 level for the first time ever, only to end the session 0.1% lower overall.
 
Crude oil prices edged higher for the week, while longer-term borrowing costs held on track for their lowest weekly close in 6 as 10-year US Treasury yields offered new buyers 4.39% per annum.
 
"With interest rates where they are, they should really be hurting gold," says one trading advisory.
 
"This tells me that the bid behind gold is not [about] interest rates [cuts], as these are being pushed back, but more a function of geopolitical tensions.” 
 
"Global gold demand has not grown at all [by weight] during the past decade," says analysis from Swiss private bank Julius Baer.
 
"[So] gold’s record-breaking rally can be explained by an increase in buyers’ willingness to pay, spiced up with some speculation."
 
Chart of gold priced in US Dollars, last 12 months. Source: BullionVault
 
Following Wednesday's weaker-than-expected US inflation and retail sales data, new figures yesterday said industrial output flatlined in April while new building permits fell instead of rising as analysts forecast.
 
Watch or listen to our Gold Market Reports on YouTube.
 
China's industrial output today jumped past consensus expectations with 6.7% annual growth for April, but growth in the No.2 economy's retail sales slowed hard as house prices dropped 3.1% year-on-year and fixed-asset investment also missed forecast.
 
Japan's economy shrank 2.0% per year in real terms in the first 3 months of 2024 thanks to prices rising 3.6%.
 
Unemployment in Australia rose back to 4.1% in April, matching January's 2-year high.
 
"[US] economy activity...strengthened, and by more than...anticipated," said Cleveland Federal Reserve Bank President Loretta Mester on Thursday, speaking about regional mid-western reports.
 
"How much downward pressure is monetary policy putting on the economy? That's an unknown," said Minneapolis Fed President Neel Kashkari in separate remarks.
 
"That tells me we probably need to sit here for a while longer until we figure out where underlying inflation is headed."
 
"The Fed has to be patient and vigilant," agreed Raphael Bostic, Bank of Atlanta President.
 
"There is still a lot of pricing pressure in the economy [but] businesses say they are at the limits of pricing power and not able to fully pass-through input costs."
 
With gold priced in US Dollar terms trading at $2384 per Troy ounce Friday morning in London, the UK gold price in Pounds per ounce showed a 0.5% drop from last weekend at £1884 while the Euro gold price was deadflat at €2200.
 
Silver meantime held onto this week's steep jump, trading at $29.70 and heading for the highest weekend level since early 2013.

 

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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