Gold News

Gold Prices Retreat from New All-Time Highs in All Major Currencies

GOLD PRICES retreated on Thursday after rallying to fresh all-time highs in all major currencies overnight as Federal Reserve policymakers held interest rates steady and maintained their outlook for three cuts this year, despite recent hotter-than-expected inflation data writes Atsuko Whitehouse at BullionVault.

The Bank of England meanwhile maintained UK interest rate at 5.25% for the fifth consecutive meeting on Thursday, even though inflation dropped on yesterday's data for February.

In contrast, the Swiss National Bank (SNB) cut its main interest rate by 25 basis points to 1.50%, marking its first rate cut in nine years and the first for any major central bank to ease monetary policy aimed at addressing inflation.

“The weekly closes tomorrow for gold & silver will be important, but even softer closes won’t take away from fact that the Fed has moved the inflation goalposts ahead of elections,” said Nicky Shiels, head of metals strategy at Swiss refining and finance group MKS Pamp.

The Dollar index – a measure of the US currency's value versus its major peers – rose 0.4% to the highest in 2 weeks.

Spot gold in the US Dollar fell to $2180 per ounce on Thursday afternoon after climbing to a record high of $2222 on Wednesday evening, nearly $30 above the previous 'record gold high' on 8 March 2024.

Live Gold Spot Price Chart | BullionVault

Wholesale bullion in Euro terms surged 1.3% above its prior high to reach €2033 on Wednesday, while the UK gold price in Pounds per ounce touched £1737, some 1.7% above the peak set in early March 2024.

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The yellow metal then cut its overnight gains, trading back at €2003 and £1715 on Thursday.

Meanwhile, gold prices in Swiss franc surged to a fresh all-time high at CHF 1976 per ounce on Thursday as the franc fell more than 1% against the US Dollar after the SNB’s decision.

As anticipated, the Federal Reserve maintained its benchmark overnight interest rate within the 5.25%-5.50% range on Wednesday, where it has remained since July.
According to the Fed’s so-called dot plot,10 of the Fed’s 19 officials still anticipates the policy rate falling by at least three-quarters of a percentage point by the end of this year, although far fewer officials expected the central bank to risk even deeper cuts.  
This saw market expectations for the Federal Reserve's end-2024 interest rate fall to 4.52%, the lowest in over a week, compared to the latest Fed forecast of 4.6%, according to the CME’s FedWatch tool.
Federal Reserve Chair Jerome Powell said on Wednesday, “Recent high inflation readings have not changed the underlying story of slowly easing price pressures in the US,” as the central bank raised its forecast for core inflation to 2.6% this year from 2.4% at the December meeting. 
The US consumer price-index (CPI) inflation, excluding fuel and food prices, came in hotter than expected at 3.8% in February, although easing by one tick from the previous month.
“The economy is performing well,” said Powell in the news conference after the FOMC announcement.   The Fed officials predicted that US gross domestic product would expand by 2.1% this year, compared with their previous forecast of 1.4%.
Prices for silver, primarily an industrial metal accounting for nearly 60% of its annual demand from industrial uses, rose to a three-month high hitting $25.77 per ounce early Thursday before erasing all gains to below $24.90.
Global stock markets rose on Thursday, as stocks in Japan, Hong Kong and across Europe climbed after the US major indexes rallied to new closing highs.  
Norway's central bank kept its benchmark interest rate unchanged at a 16-year high of 4.50% on Thursday, while the central bank of Turkey, the No.5 gold-consumer nation unexpectedly raised interest rates by 500 basis points to 50%, as its inflation rose to a higher-than-expected 67% last month.
Turkey’s gold investment demand last year almost doubled to 160 tonnes from 2022, according to the mining-industry’s World Gold Council.


Atsuko Whitehouse is the Head of the Japanese Market at BullionVault and the Editor of Japanese GoldNews.

See all articles by Atsuko Whitehouse here.

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