Gold hits fifth record high in March

NEW DELHI, Mar 21 (Reuters): Gold prices on Thursday hit record highs for the fifth time this month after the US Federal Reserve signalled it would press ahead with three rate cuts in 2024 despite elevated inflation.
Spot gold was up 1.1 per cent at $2,209.65 per ounce at 1035 GMT after hitting an all-time high of $2,222.39 earlier in the session. US gold futures soared 2.4 per cent to $2,212.40.
"The rally was started by yesterday's Federal Reserve comments, basically confirming their intention to eventually start cutting US interest rates," said Julius Baer analyst Carsten Menke.
"The mood in the gold futures market is very bullish. So your hedge funds or any other short-term traders or trend followers are positioned for higher prices, and I think this is the segment that is in the driving seat while the physical gold market is rather soft."
Despite recent high inflation readings, Fed chair Jerome Powell said the US central bank is still likely to reduce interest rates by three-quarters of a per centage point by the end of 2024, but that it also depends on further economic data.
Fed funds futures traders are now pricing in a 74 per cent probability that the Fed will begin cutting rates in June, up from 60 per cent before the rate decision, according to the CME Group's FedWatch Tool.
The dollar slipped to a one-week low against its rivals, while benchmark US 10-year Treasury yields also dipped.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making greenback-priced bullion more appealing for other currency holders.
Spot gold may retest resistance at $2,222 per ounce, a break above which could lead to a gain into the $2,228-$2,234 range, according to Reuters' technical analyst Wang Tao.
Spot silver fell 0.4 per cent to $25.51 per ounce, platinum rose 0.6 per cent to $912.10 and palladium dropped 0.9 per cent to $1,012.22.