Gold prices surged to a new all-time high on Friday, with gold futures for April delivery settling at $2,178.60 per troy ounce on the Comex division of the New York Mercantile Exchange, after briefly touching $2,202.35 — marking the first time the precious metal has breached the $2,200 threshold.
 

This milestone capped off a 4% gain for the week, fueled by growing investor confidence in upcoming interest rate cuts by major central banks and ongoing geopolitical instability that continues to drive demand for safe-haven assets.
 

The rally gained further support following U.S. employment data released Friday, which showed 275,000 jobs added in February, surpassing expectations of 160,000. However, slower wage growth and a rise in the unemployment rate suggest the U.S. labor market may be cooling, giving the Federal Reserve more room to consider rate cuts in the coming months.
 

Bond markets reflected this shift, with the 2-year Treasury yield dropping 2 basis points. A dovish signal from the European Central Bank, which lowered its inflation forecast earlier in the week, also bolstered expectations for global rate easing by mid-year.
 

As a non-interest-bearing asset, gold becomes more attractive in a low-rate environment, reducing the opportunity cost of holding the metal compared to interest-yielding assets like bonds.
 

Despite this rally, global gold exchange-traded funds (ETFs) have continued to experience outflows. According to the World Gold Council, February marked the ninth consecutive month of outflows, with global gold ETF assets under management declining by 1.8% to $206 billion.
 

Yet, central banks remain strong buyers of gold. In 2023, they purchased 1,037 tonnes, close to the record set in 2022, with China leading the drive to diversify foreign reserves and reduce exposure to the U.S. dollar.
 

Looking ahead, market attention turns to upcoming U.S. inflation data, expected to provide critical signals about the Federal Reserve’s next moves. According to a note from RBC, Tuesday’s inflation report could heavily influence the timeline for potential rate cuts.
 

With macroeconomic uncertainty persisting, gold appears set to remain a focal point for investors seeking both safety and opportunity in a shifting global financial landscape.
 

— AccGn News Team