The price of gold rose by 0.2%, despite the positive dynamics of the US currency, as concerns about the escalation of tensions in the Middle East increased demand for safe haven assets.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.15% to 106.35.
Since the beginning of April, gold prices have jumped by 6.6%, and last week set a record high at $2,431.29, helped by purchases of precious metals by central banks and rising inflation expectations.
Meanwhile, uncertainty about the prospects for easing the Fed's monetary policy is putting some pressure on gold prices. The data from the United States raised questions about the prospects for rate cuts - market participants now expect less than two rate cuts by the end of the year, compared with three cuts predicted about a month ago. According to the CME FedWatch Tool, markets see a 21.0% probability of a 25 basis point rate cut at the Fed meeting in June, and a 46.3% probability of a rate cut in July (compared to 75.0% a week earlier).
“We project $3,000/oz gold over the next 6-18m, - said Citi’s analysts. - The financial gold “price floor” has also moved higher from around $1,000 to $2,000 per ounce”.
Meanwhile, Goldman Sachs referred to the gold market as an “unshakeable bull market" and revised upward its price target for the yellow metal from $2,300 per ounce to $2,700 by the end of the year.