Gold prices recorded a new high of 2222.72 in Asian trade on Thursday, tracking a sharp drop in the dollar after the Federal Reserve kept interest rates steady and signaled that it was still considering rate cuts this year. <\/p>\n\n\n\n
Fed Chair Jerome Powell said that while he did see some recent stickiness in inflation, the underlying story of easing inflation remained intact. This was coupled with Fed officials forecasting a 75 basis point drop in interest rates by end-2024. Such a scenario bodes well for gold, especially after rising interest rates dented the yellow metal over the past two years. Traders were now pricing in a 73.4% chance that the Fed\u2019s first rate cut will come as soon as June, according to the CME Fedwatch tool. Still, the Fed also substantially upgraded its outlook for the U.S. economy in 2024, now forecasting growth of 2.1%, compared to prior forecasts of 1.4%. This could potentially limit safe haven demand for gold, amid increasing optimism over a soft landing for the U.S. economy<\/p>\n\n\n\n
Gold was a standout performer, notching new highs on the prospect of lower interest rates in the coming months. Spot gold rose as much as 1.2% to a record high of $2,222.14 an ounce, while gold futures expiring in April surged more than 2% to a record high of $2,224.80 an ounce. Both instruments trimmed some gains, but were above the $2,200 level.<\/p>\n\n\n\n