LONDON: Gold prices hit a record high for an eighth consecutive session on Tuesday with support from momentum-following funds and inflated geopolitical tensions.
Spot gold was up 1.1 per cent at US$2,363.42 per ounce by 0936 GMT after hitting a record high of US$2,365.09.
"Strong underlying momentum with the buy-on-dip still the prevailing strategy among traders," said Ole Hansen, head of commodity strategy at Saxo Bank.
"Geopolitical risks related to Russia/Ukraine and the Middle East are still playing a supporting role, and the focus is changing from the negative impact of lower rate cut expectations towards higher and sticky inflation," he added.
The broader market is waiting for the U.S. Federal Reserve's policy meeting minutes and U.S. inflation data due on Wednesday for fresh signals on future U.S. rate path.
Elevated interest rates usually constrain the appeal of holding non-yielding gold, but the precious metal has been ignoring these factors so far this month.
From the technical point of view, the April rally moved spot gold prices deep into the overbought territory, as indicated by the relative strength index.
Spot silver rose 1.0 per cent to US$28.11 per ounce after hitting US$28.15, its highest level since June 2021.
"Silver is trying – for a second day – to gain a foothold above US$28. If successful, gold may enjoy some additional tailwind," Hansen added.
Supporting the momentum further, analysts at BofA said in a note on Tuesday that gold could rally to US$3,000 per ounce by 2025, and silver would benefit from that as well as stronger industrial demand taking above US$30 within the next 12 months.
Platinum gained 2.3 per cent to US$980.9 and palladium rose 1.7 per cent to US$1,060.75.
Palladium prices, according to BofA, are set to trend lower underperforming platinum in the longer term as demand is dominated by auto catalysts. - Reuters