Gold keeps hitting record highs on renewing inflation fears

Gold prices continued to rise to a record high on Wednesday, as fears of inflationary pressures boosted demand for the yellow metal as a hedge, as well as traders ignoring doubts about an imminent cut in US interest rates and rising Treasury bond yields.

According to Reuters, gold rose in instant transactions by 0.2% to reach $2,283.76 per ounce by 0602 GMT, after hitting a record high of $2,288.09 earlier in the session. The precious metal has recorded successive record highs since Thursday.

Gold futures in the United States increased 1% to $2,304.20.

“Gold continues to receive safe-haven flows as Ukraine continues to attack Russia’s oil infrastructure, to the point that it (gold) is ignoring rising US Treasury yields and the possibility that the Federal Reserve (the US central bank) will not cut interest rates,” said Matt Simpson, chief analyst at City Index. in June”.

Federal Reserve policymakers said on Tuesday they believe it would be “reasonable” to cut US interest rates three times this year, although the latest strong economic data has raised investor doubts about that outcome.

Data this week showed that the manufacturing sector in the United States unexpectedly rebounded, as rising raw material prices raised fears of a possible return of inflation.

“With commodity prices generally rising, that brings the risk of another round of inflation, so investors may be hedging against inflation,” Simpson said.

Gold, which is used as a hedge against inflation and a safe haven during times of political and economic uncertainty, has risen more than 10.8% so far this year and is on track to rise for the seventh day in a row.

As for other precious metals, silver rose in spot transactions 1% to $26.36 per ounce, platinum increased 0.9% to $926.80, and palladium rose 0.8% to $1,011.62.