Gold surges past $2400 amid multiple bullish catalysts

Gold prices soared past $2,400 on Friday, driven by a confluence of favorable factors that propelled the precious metal to new heights. June 2024 futures settled at a record $2,419.80, up $39 or 1.64%. Spot gold mirrored this rise, climbing $41 or 1.78% to an all-time high of $2,417.50. This remarkable rally was primarily fueled by traders bidding up gold prices while the U.S. dollar remained virtually unchanged, indicating that currency fluctuations were not significant. The surge in gold prices was further amplified by the SPDR Gold Shares ETF (GLD), which also hit a record high, closing at $223.66, up $3.63 or 1.65% per share.

One of the key catalysts driving gold’s ascent was the recent Consumer Price Index (CPI) report, which showed inflation moderating in April, falling below economists’ forecasts. This data fueled market optimism that the Federal Reserve may adopt a more accommodative stance, implementing rate cuts sooner and larger than anticipated. However, the central bank has cautioned that it relies on trends rather than single data points, tempering expectations of an immediate policy shift.

China’s stimulus measures to stabilize its crisis-hit property sector have also bolstered gold prices. As a major consumer of the precious metal, China’s central bank has been actively accumulating gold reserves, surpassing all other countries in recent years. This trend has been mirrored by global banks worldwide, which collectively purchased record amounts of gold in 2022 and 2023 to fortify their reserves.

Gold’s resilience is further underscored by its ability to defy traditional correlations, rising on days when the U.S. dollar and Treasury yields have also climbed. According to the World Gold Council, gold miners’ global average total expenses stood at $1,342 per ounce in the last quarter of 2023, highlighting the potential for substantial profits at current price levels.

With multiple bullish factors converging, gold’s resurgence appears poised to continue. Traders and investors are witnessing a historic rally, as spot gold and the GLD ETF closed at record highs on Friday. As the precious metal edges closer to its all-time high in futures trading, the momentum could propel gold to greater heights in the coming days and weeks.

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