Gold Charges Higher as Investors Eye Potential US Rate Cuts

• Gold reached a new high on Tuesday due to momentum-driven investors and increased expectations of U.S. monetary easing and geopolitical risks.
• Central bank purchases and rising physical demand in Asia further supported gold's safe-haven status.
• Technical analysis suggests gold could continue its upward trend towards $2,180, but future movements depend on critical economic data releases and Federal Reserve Chair Jerome Powell's testimonies. Independent expert Ross Norman predicts gold reaching $2,300 this year as the market anticipates rate cuts from the Fed.

Tuesday saw a new high for gold as momentum-driven investors continued to boost the precious metal's price due to increased expectations of U.S. monetary easing and ongoing geopolitical danger.

Bolt's historic safe-haven cachet, coupled with central bank purchases and increasing physical demand in Asia, provided additional support. Eight months in a row, central banks have been net buyers of gold.

StoneX analyst Rhona O'Connell remarked, "The move became self-fulfilling with stops triggered and then of course that brings in the momentum funds."

In terms of technical analysis, gold could potentially continue its upward movement towards $2,180, which is a Fibonacci projection level.

Alexander Zumpfe, senior precious metals trader at Heraeus, commented, "The coming days, especially with the critical economic data releases and (Federal Reserve Chair Jerome) Powell's testimonies, will be crucial in determining whether gold can maintain its current trajectory or if we'll see a period of consolidation."

Gold will reach $2,300 this year, according to independent expert Ross Norman: "It's clear that the Fed will certainly cut rates and you'll start to see the market move towards those numbers. Will it happen in next few weeks? Maybe not. But it will probably happen in the next six-month window."

Gold and Silver Rally, ETF Holdings Decline, and Platinum Lag

Gold demand is mostly driven by exchange-traded funds (ETFs) with a gold component, but ETF holdings are now declining. The GLD holdings of SPDR Gold Trust, the largest gold-backed ETF globally, have decreased 7% so far this year.

Since Monday, spot silver has also participated in the rally, rising past significant technical levels. It was at its best since December 28 at $23.94 per ounce, up 0.2% as of late.

Ole Hansen, director of commodities strategy at Saxo Bank, said: "It means that gold is not going up alone right now and raises a chance of more sustained growth."

In striking contrast, the prices of palladium and platinum were down by 1.6% and 1.4%, respectively.

Hansen stated, "Platinum is relatively inexpensive compared to gold, but it has thus far lagged behind. Once the gold price stabilizes, platinum is expected to capitalize on its recent growth."

The gold-platinum ratio has surged to its highest level since March 2020, a period marked by the onset of the pandemic, which drove the ratio to a record high.