Gold Prices and Market Analysis

Gold prices surged to record highs, bolstered by bearish remarks from Fed Chair Jerome Powell. Expectations of an early Fed interest rate cut in June boosted the appeal of gold futures. Gold's surge above $2000 projected estimations of $2300-$2500 price ranges this year by several US banks and institutions.

Price Trends

Gold prices rose by 1.4% to $2265 an ounce, marking a record high, with a session-low at $2234. In the first quarter, gold prices rallied by 7.8%, marking the second quarterly profit in a row. In March alone, gold prices climbed by 9.3%, the largest monthly increase since July 2020.

Powell's Remarks

Fed Chair Jerome Powell stated after reviewing inflation data that while numbers align with expectations, the Fed won't react excessively just yet, despite inflation slowing compared to last year. His stance remains consistent with previous statements, indicating no change in the Fed's forecasts of three interest rate cuts this year.

US Interest Rates

Following Powell's remarks, the probability of a 0.25% Fed interest rate cut in June rose from 59% to 70%. Market sentiment still reflects expectations of a total of three Fed interest rate cuts this year, amounting to 75 basis points.

Chinese Gold Demand

China's gold demand has witnessed a significant uptick, particularly led by the People's Bank of China, which has consistently increased its gold reserves for the past 15 months according to data from the Global Gold Council.

Gold Performance Outlook

JPMorgan's analysts foresee gold prices hitting $2500 an ounce this year. Goldman Sachs' analysts project a minimum price target of $2300 an ounce for this year, anticipating policy easing by the Federal Reserve. Gold holdings at the SPDR Gold Trust remained steady on Thursday at 830.15 tonnes, marking the lowest level since March 13.