Gold prices rose on Monday, mainly driven by expectations that the Federal Reserve might cut interest rates this year, but the closing price did not reach the highest point of the day.
The Zhitong Finance App learned that gold futures for March delivery on the New York Mercantile Exchange closed up 0.7% to $2,174.80 an ounce. This was the third increase in the past four trading days and the fifth highest closing price in history. It was only 0.35% lower than the 52-week high of $2,182.50 set on March 11. According to information, the rise in gold prices on Monday was mainly driven by expectations that the Federal Reserve might cut interest rates this year, but the closing price did not reach the highest point of the day.
According to information, on Monday, Federal Reserve officials spoke out intensively, and an official expressed caution about cutting interest rates. Last week, for the fifth time in a row, the FOMC decided to keep interest rates unchanged and said it is closely monitoring inflation to see if it is on a sustainable path to the Federal Reserve's 2% target.
Among them, Chicago Federal Reserve Chairman Goulsby said that he expects to cut interest rates three times this year. In an interview, Goulsby pointed out that his views are consistent with the median forecast issued by the Federal Reserve after the March 19-20 meeting. In this forecast, ten officials expect interest rates to be cut at least three times this year, while nine others forecast two or fewer.
Meanwhile, Atlanta Federal Reserve Chairman Bostic reiterated his expectation that interest rates will only be cut once this year. He added that as long as the economy is in good condition, the central bank can be patient. Meanwhile, Federal Reserve Governor Cook also said that the central bank must take a cautious approach to cutting interest rates in order to provide more time for inflation to slow down in some areas of the economy.
But despite that, according to XTB research director Kathleen Brooks (Kathleen Brooks), gold's position as a hedge against inflation has supported price increases so far this year. As major central banks prepare to lower interest rates, continued market concerns about inflation should continue to support gold prices.
Analysts at SP Angel said that the price of gold is becoming more and more attractive. This trend is driven by a combination of factors, including reports that China and other central banks continue to buy gold, recent interest rate adjustments by central banks such as Japan and Turkey, and market expectations for US interest rate cuts. Furthermore, investors remain concerned about America's high level of government debt.
Additionally, Bart Malek (Bart Malek), head of commodity strategy at TD Securities, believes that the price of gold could easily reach $2,300 or higher in the second quarter. He said that once interest rate cuts are confirmed, independent traders and ETF investors who have not participated strongly in the rise will enter the market.
However, Melek also said that stronger economic data could cause gold prices to fall back.
Meanwhile, silver ended five consecutive trading days of decline. Silver futures contracts for March delivery closed up 0.2% to $24.745 an ounce.
Related ETFs include: SPDR Gold Shares ETF (GLD.US), VanEck Gold Miners ETF (GDX.US), VanEck Junior Gold Miners ETF (GDXJ.US), iShares Gold Trust ETF (IAU.US), Direxion Daily Gold Miners Index Bull Shares 2X ETF ( NUGT.US), Sprott Physical Gold Trust (PHYS.US), SPDR Gold MiniShares ETF (GLDM.US), Goldman Sachs Physical Gold ETF (AAAU.US), abrdn Physical Gold Shares ETF (SGOL.US), GraniteShares Gold Trust ETF ( BAR.US), iShares Silver Trust ETF (SLV.US), Sprott Physical Silver Trust (PSLV.US), abrdn Physical Silver Shares ETF (SIVR.US), Amplify Junior Silver Miners ETF (SILJ.US)
It is worth mentioning that the price of Bitcoin, known as “digital gold,” once again climbed above $70,000, rising 7.34% during the day. According to information, nearly 900 million US dollars of capital was withdrawn from these ETFs last week, reflecting the continued outflow of Grayscale Bitcoin Trust's capital and a slowdown in product subscriptions from BlackRock and Fidelity.
These 10 funds experienced their worst week this year since they were founded in January. Nathanaël Cohen, co-founder of the digital asset hedge fund INDIGO Fund, said: “Despite the drag in ETF inflows, the volume of buy orders around $60,000 is still high, which shows that the market is eager to buy when it falls.”
New demand for Bitcoin ETFs is the main driving force behind Bitcoin's historic rally this year. However, last week's massive outflow of capital prompted traders to hedge more against falling prices, as well as massive liquidation of leveraged long bets in the cryptocurrency futures market.