Hopes of US rate cuts alone are unlikely to have driven latest leg higher, say strategists
The price of gold has surged 7 per cent in just over a week to hit record highs, leaving longtime market watchers struggling to explain what has been one of the yellow metal’s most curious rallies. The sudden price move has lifted the haven asset above its previous peak reached in December to hit nearly $2,195 per troy ounce on Friday, according to LSEG data.
But Rhona O’Connell, analyst at commodities brokerage StoneX, said plenty of factors could justify a high gold price, such as China recently toughening its rhetoric on Taiwan, simmering banking tensions in the US and the elections coming in a number of countries this year. But she said none of those factors was behind last week’s move, and instead pointed to momentum traders — computer funds that latch on to rising prices — piling in after gold broke through a key price level.
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