Gold prices hit a two-week high on Thursday, after recent weak US economic data raised market expectations of interest rate cuts by the Federal Reserve later in the year, while uncertainty related to multiple global elections provided support.
Spot gold was up 0.3% at $2,333.69 per ounce at 0908 GMT, having hit its highest since June 7 earlier in the session. U.S. gold futures were firm at $2,347.30.
“Gold remains primarily driven by market expectations regarding the Fed’s policy shift. It could remain in a swing range for some time, until US economic data pave the way for higher rates lower interest rates and will trigger the next gold rally,” said Han Tan, chief analyst at Exinity Group.
Last week’s data showed moderation in labor market and pricing pressures, followed by soft retail sales data on Tuesday, suggesting economic activity remained sluggish in the second quarter.
The Fed is looking for further confirmation that inflation is cooling as it heads cautiously toward what most expect to be a rate cut or two later this year.
Lower interest rates reduce the opportunity cost of holding unprofitable bullion.
Additionally, gold was supported by safe-haven bids amid lingering geopolitical tensions, downside economic risks and French political uncertainty.
Last week, the President of France called a snap election, and high debt levels were a source of concern for market participants.
The market’s immediate focus is on weekly US jobless claims data, due at 12.30 GMT, and Friday’s flash Purchasing Managers’ Indexes.
“We maintain a positive view on gold with a price target of $2,500 an ounce by the end of 2024,” ANZ analysts said in a note.
Spot silver rose 1.5% to $30.19 per ounce, platinum rose 0.1% to $981.66 and palladium gained 0.2% to $906.46.
