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Gold hits record high; silver peaks on Fed rate cut speculation

April 3, 2024

LONDON (April 3) Gold prices have soared to an all-time high of 2288.00 USD per troy ounce, while silver reached its highest in two years, driven by speculation surrounding the US Federal Reserve's monetary policy. This surge followed comments from two Fed officials, Mary Daly of the FRB San Francisco and Loretta J. Mester of Cleveland. Both anticipate three rate cuts by the Fed in 2024, although they emphasized there is no immediate need for these adjustments.

The anticipation of a more accommodative monetary policy has been the primary driver behind gold's significant 11% price increase this year, demonstrating substantial gains for what is typically considered a conservative investment. However, this optimism is somewhat tempered by the current US economic data, which presents a complex backdrop for the timing of these expected rate cuts.

Investors and market watchers are now eagerly awaiting remarks from the US Fed Chair Jerome Powell, who is expected to provide further insights into the Federal Reserve's monetary policy outlook soon.

Precious metals traditionally benefit in low-interest-rate environments since they do not offer yields like interest-bearing assets. This dynamic underscores the current rally in gold and silver prices.

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