Source: Golden Ten Data

Despite the “bright” US non-farm payrolls data, which caused traders to lower their expectations for the Federal Reserve's interest rate cut in June, spot gold maintained gains on Friday, breaking through 2,320 US dollars/ounce and continuing to reach new highs. It rose more than $30 per day, and is likely to record three consecutive weekly highs. Spot silver also followed the rise, with an intraday increase of 1%.

COMEX's most active silver futures contract instantly traded 737 lots within one minute from 9:56 to 9:57 Beijing time on April 5, with a total trading contract value of US$100 million.

Some economists point out that even if jobs continue to grow, the low wage inflation rate may cause the Federal Reserve to continue cutting interest rates later this year. According to the Chicago Mercantile Exchange's FedWatch tool, the market expects a 58% chance of cutting interest rates in June, down from 66% on Thursday.

Against the backdrop of heightened geopolitical tension, the central bank's strong purchases and inflows of safe-haven funds have boosted demand for gold, driving the price of gold up more than 25% since October. Market participants have even asked a bold question: “Can gold follow the 'Coco Route'?”

Cocoa prices have more than doubled since the beginning of 2024 due to poor harvests in Côte d'Ivoire and Ghana, and none of the other major commodities that Bloomberg tracks can match Cocoa's performance at the beginning of the year.

Nicky Shiels (Nicky Shiels), head of metals strategy at Swiss gold refiner MKS PAMP, has raised the 2024 gold price forecast, but she also said: “There is almost zero chance that gold will replicate these increases in the same period of time.”

The rise in cocoa prices is driven by a shortage of supply, but the supply in the gold market is guaranteed by large stocks held by individuals and central bank reserves, which hold one-fifth of all gold ever mined.

She said, “Cocoa cannot be removed from inventory as fast as gold bars are removed from inventory.” She raised her forecast for the average price of gold in 2024 by $150 to reach $2,200 per ounce.

However, although the gold market may not be able to follow the “cocoa route” and technically speaking, the price of gold seems likely to require a sharp correction due to overbuying, analysts have maintained a bullish tone.

Marex analyst Edward Meir (Edward Meir) said, “It's hard to say where the price will peak because there are no resistance 'road signs' on the chart.”

Johan Palmberg (Johan Palmberg), a senior quantitative analyst at the World Gold Council, said that the gold OTC and futures markets have been very active, and trading volume is estimated to have increased by 40%.

“Compared to stocks and bonds, the gold options market is extremely active, which means that people are currently particularly interested in gold.”

Furthermore, many analysts expect that once the Federal Reserve starts to lower the benchmark interest rate, triggering demand from investors who are still on the sidelines (such as physically backed gold ETFs), then the price of gold will reach a new high.

Bank of America analysts said in a report: “We have previously proposed that if the Federal Reserve cuts interest rates in the first quarter of 2024, then the target price for gold at the end of the year will be 2,400 US dollars per ounce. But now, even if interest rate cuts arrive later, we will maintain this forecast.”

Editor/jayden