Gold Rate Hits Record High: What's Next? Will it Shine or Consolidation?

Gol Rate Today hit the market high again. The question now arises whether the gold price will continue to rise or consolidate after reaching this high value. Predicting this is a complex task.

In February, global central bank gold reserves continued their upward trajectory, expanding by 19 tonnes. This marks the ninth consecutive month of growth, although the increase was notably lower compared to January, which saw a total addition of 45 tonnes. Despite the month-to-month fluctuation, the year-to-date figures show a substantial increase, with central banks collectively adding 64 tonnes over January and February, a significant rise compared to the same period in 2022.

The People’s Bank of China emerged as the largest buyer in February, boosting its gold reserves by 12 tonnes to reach a total of 2,257 tonnes. This accumulation represents the 16th consecutive month of growth in China's gold holdings, underscoring the country's ongoing interest in diversifying its reserve assets.

Gold prices have stabilized on Friday after reaching new highs, driven by expectations of lower US interest rates in this year. This optimism is tempered by a wait-and-see approach among traders, who are eagerly anticipating key employment data. Federal Reserve Chairman Jerome Powell has emphasized that the central bank has the flexibility to delay its first rate decrease, given the economy's strength and recent inflationary pressures.

Factors affecting the price of gold:

Based on different factors it is difficult to predict whether the gold price will rise or consolidate after reaching such a high price. These factors influencing the status of gold price in the market are:

• Market sentiment based on geopolitical and economic conditions.
• Gold denominating the US dollar's strength and building pressure.
• Technical factors using the analysis to find out the potential rise in the price of gold.
• Performance in a low-interest rate environment, a rise of trends during a high inflation period.

As currency exchange is creating a huddle in the market therefore many countries are buying gold as a means of protective measure. By the end of this financial year, more than 15 countries will have central elections which will contribute highly to the volatile market changing the commodity of the market during this period.

Measures taken to consolidate the gold prices:

Although the Fed policymakers are indicating to reduce the interest rate by 75 basis points by the end of this financial year bringing relief to the common man who ultimately suffered during the sudden high price rise in the market, one basis point or BSP is equivalent to one-hundredth of a percentage point. The problem will arise when the Fed cannot meet the people's expectations regarding the rate cuts. According to the predictions of experts, the prices of gold will consolidate to this level for a while before hitting any high record further.