Gold price surged over $36.52 due to several Central Banks continuing to cut interest rates

[radex78]

Gold prices surged due to many Central Banks continuing to cut interest rates, geopolitical tensions, and recovering Chinese trade data.
Gold price surged over $36.52 yesterday with a rise of 1.58% from $2306 to a high of $2346 by forming a long-body bullish candlestick with no shadow.

 Sweden, the Riksbank took steps to reduce interest rates by 0.25% to 3.75%. The Bank of England meeting showed an increasing willingness to lower interest rates. The Swiss National Bank (SNB) lowered interest rates at its March meeting, the RBA's dovish policy and the European Central Bank (ECB) has guaranteed it will cut interest rates in June.

Geopolitical tensions are another trigger are also a concern for traders, the Israeli attack on Rafah shows the need for a ceasefire so that the war continues. Elsewhere the Ukraine vs Russia war adds further pressure on the risk side. The next Chinese data showed China's exports rose more than forecast at an annualized 1.5% in April, recovering from a 7.5% decline in the previous month is becoming another reason behind gold soar.

[radex78]

Gold prices fell after rallying last week, in trading on Monday the price of gold fell from a high of $2364 to a low of $2332.
Prices may still consolidate ahead of the release of US inflation data which will be released on Wednesday this week.
Inflation data is very important and will probably get a market response because it relates to the possibility of the Fed cutting interest rates or not.

[radex78]

Yesterday's gold price rose from a low of $2334 to a high of $2359. Apart from geopolitical events, gold is also the choice of central banks as a reserve asset. The BRIC countries have also abandoned the USD as a currency for international transactions, increasing demand for gold. The only obstacle is the Fed's interest rates which are still high, this causes people to prefer high yields to buying gold. Market concern to US inflation data today.

[radex78]

Gold prices failed to continue yesterday's bullishness and were stuck near the upper band line which then pulled back due to profit-taking. Gold prices rallied sharply after the CPI data was released with the actual data being lower than forecast. This data received a market response and caused the price of gold to rally strongly reaching a high of $2397 

The release of cooler US Consumer Price Index (CPI) and Retail Sales data for April provides expectations for the future path of US interest rates, which is an important factor for Gold's value.

The lower CPI data reflects disinflation which advances expectations that the Fed will cut interest rates. According to CME's FedWatch Tool, there is about a 75% chance that the Fed's interest rates will be at lower levels after the September meeting.
 

[radex78]

The price of gold still has the potential to be bullish above the $2400 price level. Last week, the price of precious metals, both gold and silver, surged after US inflation data showed cooling, giving hope that the Fed would cut interest rates. Market rumors predict the Fed might cut interest rates at its September meeting.
On the other hand, China's improving economy shows positive reports which also boost gold prices because this country is one of the world's largest gold importers. In terms of geopolitical risks, gold is also one of the safe-haven assets of choice and is a global central bank reserve. The gold price has reached a new ATH and may still climb higher.