Gold Hits Record $2,400 as Clouded Rate Cut Outlook Boosts Safe Haven Demand —

String of economic data propelled yellow metal to another record on Friday as gold bugs knocked out $2,400 per ounce.

Key Points:

• Gold hits all-time high of $2,400.
• Markets react to economic data.
• Gold up 20% over past 40 days.
• Gold prices XAUUSD ticked up to a new record high of $2,400 per ounce Friday morning after a batch of US economic data stirred up dealmaking. The yellow metal advanced for a second straight day as gold bugs reacted to softer-than-expected producer prices. Before that, inflation for March arrived at 3.5%, more than the 3.4% consensus, and clouded the way forward for the Federal Reserve.
• The Fed is expected to cut interest rates three times this year. But if inflation and other data keep showing that the US economy is running hot, policymakers may decide to walk back the planned trims to borrowing costs. This uncertainty is prompting traders to seek the safe-haven allure of gold as a shelter.
• The recent leg up extended gold’s record-setting run to a total of more than 20% for the past 40 trading days. Of those, only 11 have been in the red, demonstrating the elevated search for cover. The economic narrative now happens to benefit gold from both sides. On the one hand, higher inflation spotlights the metal as a hedge against price increases. And on the other, if the Fed does move rates lower, gold, as a non-yielding asset, could become more appealing.