Gold Approaches All-Time High as Silver Surpasses $90 Amid Rate Cut Speculation

On Wednesday, gold markets kicked off with impressive momentum, as prices neared their all-time peak following encouraging signs of a faster decline in U.S. inflation. This softer data bolstered optimism for timely interest rate cuts, igniting interest in precious metals. Silver notably crossed the $90 mark for the first time, reflecting heightened demand amid a volatile global landscape.

Spot gold saw an increase of nearly 1%, trading at $4,627.95 per ounce by 0406 GMT, remaining just below the record high achieved in the prior session. Concurrently, U.S. gold futures for February delivery gained 0.8%, rising to $4,635.60, as traders leaned into long positions amidst an uplifting commodity market sentiment.

The surge in prices was fueled primarily by the latest U.S. inflation data, which fell short of expectations, affirming the view that the Federal Reserve may soon adopt a more lenient monetary policy. Lower interest rates typically enhance gold's allure as they diminish the appeal of interest-yielding investments, leading to increased demand for secure assets.

Silver once again outshone gold, breaking the $90 per ounce barrier in a momentous leap. Market experts cited a mix of robust industrial usage, a rise in safe-haven buying, and speculative interest as vital contributors to this remarkable rise. The prospect of continued monetary easing further stoked investor excitement for the metal.

Wider geopolitical tensions also played a role in bolstering demand for precious metals, as ongoing global conflicts and economic unpredictability pushed investors toward conventional safe-haven assets.

Experts suggest that gold and silver prices may keep finding support as long as inflation is contained and expectations for policy easing remain strong. However, they also warn that market volatility could increase as investors respond to forthcoming economic data and guidance from major global central banks.