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Ammon News - Spot gold, a much more global and liquid market, hit record highs on five previous trading sessions as investors jumped in looking for exposure to the metal used to preserve wealth.

Gold's record high at $2,305.04 an ounce hit on Thursday amounts to a gain of 12% since the start of the year.

Gold's April rally came on top of its 9.3% jump in March, the strongest since July 2020, which unfolded despite traditional macro headwinds such as a strong dollar and elevated U.S. real interest rates.

Over-the-counter and futures gold markets have been buoyant, with an estimated 40% rise in trading volumes, said Johan Palmberg, senior quantitative analyst at the World Gold Council.

"And there is outsized activity in the gold options market, in comparison with the likes of equities and bonds, which implies that the current interest is specifically in gold."

Further out, many analysts expect gold to test new highs once the U.S. Federal Reserve starts cutting key rates triggering demand from investors sitting on the sidelines such as holders of physically-backed gold exchange traded funds (ETFs).

"We had previously proposed a $2,400 per ounce price estimate if the Fed cut rates in the first quarter of 2024; we commit to that estimate for this year, even if rate cuts come later," analysts at BofA said in a note.

Reuters