Gold Steady After Surge in Exchange-Traded Funds
Gold held near a record after a surge in holdings in exchange-traded funds backed by the precious metal.
Bullion was trading around $2,940 an ounce on Monday, just shy of a fresh peak hit on Thursday. Prices have risen for the past eight weeks, the longest streak since 2020. Gold-backed exchange-traded funds saw their biggest net inflows since 2022 last week.
Growing concerns over disruptive trade and U.S. President Donald Trump’s geopolitical agenda have boosted demand for safe-haven bullion. Goldman Sachs Group Inc. last week raised its year-end target for the metal to $3,100, saying central bank purchases would be a key driver, as well as expanding ETFs.
The dollar fell on Monday morning, before paring losses, after reports on Friday showed U.S. business activity slowed and consumer confidence faded, while inflation expectations jumped. Swap markets are pricing in more interest-rate cuts by the Federal Reserve this year, with traders expecting the first reduction for 2025 in July, not September. A weaker dollar and lower borrowing costs typically benefit gold.
This week’s data includes the Federal Reserve’s preferred inflation metric on Friday, which is forecast to cool to the slowest pace since June. Still, slow progress in taming overall price pressures will keep policy makers cautious about lowering interest rates further.
Spot gold was little changed at $2,936.21 an ounce at 10:51 a.m. in London. The Bloomberg Dollar Spot Index was little changed, after three weeks of losses. Silver rose, while platinum and palladium fell.
Source: Bloomberg
