Gold surged above $2,250 per ounce on Monday, reaching unprecedented levels as softer US inflation figures reinforced expectations of an impending interest rate cut by the Federal Reserve in June.
The latest data revealed that the Fed-preferred PCE price index rose 0.3% month-on-month in February, a deceleration from January's 0.4% gain. Fed Chair Jerome Powell's comments reiterated the central bank's stance on rate cuts, aligning with market forecasts.
With a nearly 70% probability of rate cuts commencing in June, investors are pricing in a total reduction of 75 basis points for the year.
Lower interest rates diminish the opportunity cost of holding gold, heightening its appeal as an investment asset.
In India, the MCX gold futures contract opened with a gap-up, soaring to 69,500 and marking an all-time high. Currently, it is trading at 68,783, up by (+1.63%) from its previous close.
The Fed's news has boosted prices led to increases of over 1% in precious metals and slight gains in base metals on the MCX.
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