By Kirk Maltais and Joe Hoppe


Gold closed at another record high Monday, driven by central bank purchases. But prices may run into roadblocks due to wavering interest rate-cut expectations.

June futures on the New York Mercantile Exchange closed up 0.3% at $2,331.70 a troy ounce, a record-high close having hit a new all-time intraday high of $2,372.5 earlier in the session. That makes it 11 out of the past 13 trading sessions that gold finished higher, with futures up over 13% year to date.

A stronger-than-expected jobs report Friday has investors re-evaluating the potential for the Federal Reserve to cut interest rates this year, with JPMorgan Chase Chief Executive Jamie Dimon warning that U.S. interest rates could actually soar to 8% or more in coming years.

Gold continues to climb, decoupling from its traditionally tight relationship with U.S. Treasurys, broker SP Angel said in a note.

Instead, central bank buying has been the main driver. China's central bank added gold to its reserves for the 17th month in a row in March. Other nations have also been adding to their gold reserves, the World Gold Council told Dow Jones Newswires on Monday.

"Gold tends to become more attractive in times of instability, when investors pile into safe-haven assets as a hedge against the economic climate, geopolitical tensions or inflation," ING Economics said in a note. "We believe this is likely to continue for the rest of this year."

ING adds that if interest-rate cuts don't materialize in the coming months, then gold prices may pull back.

"We expect gold prices to remain volatile in the coming months as the market reacts to macro drivers, tracking geopolitical events and Fed rate policy."

Other precious metals continue to ride gold's coattails. Silver futures rose 1.1% to $27.712 per troy ounce. Silver has gained for eight consecutive trading sessions and last traded this high in June 2021.

Investors are turning their attention this week to Wednesday's releases of March U.S. consumer inflation figures and the minutes from the last Federal Open Market Committee meeting to gauge the path of Federal Reserve interest-rate cuts, which should determine the momentum of any new long-term trends.


Write to Kirk Maltais at kirk.maltais@wsj.com


(END) Dow Jones Newswires

04-08-24 1549ET