The price of an ounce of gold reached a new historic high of more than 2,265 dollars this Monday, April 1, with the market anticipating a drop in interest rates in the United States soon, say experts cited by Efe.
At 10:05 am in Lisbon, an ounce of gold (just over 31 grams) was being traded at around 2258 dollars (around 2092 euros), registering an increase of 1.26%.
Early this Monday morning it reached a new maximum during trading, hitting 2265.73 dollars, that is, an increase of 1.6% in relation to the close of last Thursday, when the day ended on a high, the $2229.87.
For the IG specialist, Sergio Ávila, cited by Efe, “this rally unprecedented – in gold – was driven by softer-than-expected US inflation data, which reinforced expectations that the US Federal Reserve (Fed) could start cutting interest rates as early as June.”
In his opinion, the fall in interest rates is due to the fact that consumer inflation slowed down by a tenth of a percentage point in February compared to the previous month, rising just 0.3%, which represents “a significant slowdown in compared to the upwardly revised 0.4% increase in January” and which “provides further evidence of controlled inflation, reinforcing the Fed’s position to maintain a prudent monetary policy”.
Although Fed Chairman Jerome Powell has reiterated on several occasions that the central bank is in no rush to cut interest rates, “markets have been quick to adjust their projections and now see a nearly 70% probability that the Fed will begin cutting rates in June, with a total reduction of 75 basis points expected this year.”
Thus, Sérgio Ávila commented that “lower interest rates provide a favorable environment for gold, as they reduce the opportunity cost of holding gold, increasing its attractiveness as an investment asset”.
The official also highlighted that “the shares of gold mining companies could benefit from an environment of higher prices for the yellow metal” and added that “the first relevant support – the price level that stops sales – is at 2187 dollars”, while the resistance level – the price level that limits the rise – “is at 2312 dollars, a level that should be sought in the coming sessions”.
