Market Analysis

The price of gold has surged to record highs, reaching nearly $2,230 per troy ounce, marking its fifth consecutive session of gains on Friday. However, trading activity is subdued as many market participants are likely observing Good Friday. The allure of gold is attracting buyers amid expectations of major central banks initiating interest rate cuts this year.

Investor confidence in gold is growing as anticipation builds for three rate cuts from the US Federal Reserve (Fed) in the coming months. Chicago Fed President Austan Goolsbee, adopting a dovish stance, anticipates three cuts but stresses the importance of further evidence of inflation easing before taking action.

European Central Bank (ECB) policymaker Francois Villeroy has suggested that achieving the ECB's 2% inflation target is achievable, but he warns of increasing downside risks if the ECB refrains from rate cuts. 

ECB executive board member Fabio Panetta stated on Thursday that "the conditions to start easing monetary policy are becoming apparent."

In Europe, the Swiss National Bank unexpectedly lowered rates at its March meeting, sparking speculation that other major central banks may follow suit. Meanwhile, although the Bank of Japan has abandoned its negative rate policy, it is expected to maintain an accommodative stance for the foreseeable future.

Despite a United Nations Security Council resolution urging a ceasefire between Israel and Hamas, and the release of hostages, the conflict in the Gaza Strip persists, with Palestinian militants yet to release any captives. According to the Palestinian Red Crescent, Israeli forces have besieged two additional Gaza hospitals on Sunday, trapping medical personnel amidst heavy gunfire. The escalation of geopolitical tensions has led to increased demand for safe-haven assets like gold.

Paraphrasing text from "FX Street" all rights reserved by the original author.