Gold holds steady as geopolitical risks counter rate cut concerns

Summary

• Gold hit record high of $2,431.29 per ounce on Friday
• Silver, palladium down over 1%
• Deutsche Bank forecasts gold at $2,400 by year-end

April 16 (Reuters) – Gold prices held steady on Tuesday, as safe-haven demand amid ongoing tensions in the Middle East offset rising expectations of fewer U.S. rate cuts this year.

Spot gold was little changed at $2,382.72 per ounce by 13:56 ET (1756 GMT).

U.S. gold futures settled 1% higher at $2,407.8.

The yellow metal touched an all-time high of $2,431.29 on Friday in anticipation of Iran’s retaliatory attack against Israel.

Data showed on Monday U.S. retail sales increased more than expected in March. The 10-year Treasury yields were up for the second consecutive day, making non-yielding bullion less attractive.

“The market is in pause mode and waiting for the other shoe to drop on this Israeli-Iran confrontation. You will see another rally in gold if the situation escalates,” said Jim Wyckoff, senior analyst at Kitco Metals.

“If the Middle East conflict de-escalates, market focus will turn to the Fed. It has become apparent that Fed is not going to be able to cut rates soon, which is a bearish element for gold and silver markets.”

Federal Reserve Chair Jerome Powell told a U.S. Senate panel just over five weeks ago the Fed was “not far” from gaining confidence in inflation falling to the level needed to cut interest rates but policymakers, investors and outside analysts have lost a bit of faith in that outlook in light of a series of strong economic data.

Deutsche Bank forecasts gold prices at $2,400 per ounce by year-end and at $2,600 in December 2025.

“We think gold is likely to remain on a strong footing as any profit-taking by early investors would be replaced by investment from those who have so far not participated in the move, but agree philosophically with its direction,” the bank added in a note.

Spot silver fell 2.4% to $28.17 per ounce, platinum eased 1.2% to $958.03 and palladium was down 2.3% to $1,012.00.