New Delhi [India] May 21 : Gold prices are likely to rise back again, helped by the plethora of factors defying softening safe-haven assets demand and expectations of fewer rate cuts this year by the US federal reserve bank, reported by Gulf news on Wednesday.
According to the report, prices are showing renewed upward momentum owing to gold bullish outlook and strong underlying support and robust buying, particularly from China, are pushing prices higher.
Recently, US-based investment banking firm, JP Morgan, predicts the gold price level could be elevated to USD 6,000 by 2029, which will be the end of US President, Donald Trump's current tenure.
Despite near record prices, China's gold imports reached their highest volume in nearly a year last month. China's central bank reportedly eased import restrictions to meet this booming demand, with gold shipments jumping by a substantial 73 per cent compared to the previous month, reaching 127.5 metric tons.
Contrary to that, two senior Fed officials, New York Fed President John Williams and Vice Chair Philip Jefferson sticked to "wait-and-see" stance which led market watchers to believe there's a low probability of a rate cut by Fed at the June meeting. Higher interest rates make non-yielding assets like gold less attractive.
Earlier this year, gold surged to a record USD 3,500.05 per ounce on April 22 amidst global uncertainties. Although prices saw a subsequent dip, mostly weighed down by cooling tariff tension between US and China.
Earlier this year, gold witnessed some support fuelled by US President Donald Trump's trade policies, gold is still up over 20 per cent this year. This is largely attributed to significant inflows into gold-backed Exchange Traded Funds (ETFs) and a surge in speculative demand in China.
On the dollar aspect, the USD registered its fourth straight weekly advance last week, as traders digest fading risk appetite and brace for further Federal Reserve (Fed) signals. A stronger dollar dents gold's appeal.
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