Gold breaks another record as US inflation concerns loom

By Sherin Elizabeth Varghese

(Reuters) – Gold prices extended a record run on Wednesday as concerns about rising inflation boosted demand for gold as a hedge, with precious metals traders shaking off doubts about an upcoming U.S. interest rate cut and rising government bond yields.

Spot gold rose 0.3% to $2,286.24 an ounce as of 0406 GMT, having hit a record high of $2,288.09 earlier in the session. Bullion has hit consecutive all-time highs since Thursday.

U.S. gold futures rose 1.1% to $2,306.60.

“Gold continues to flow as a safe haven as Ukraine continues to attack Russia’s oil infrastructure, to the point where it is ignoring rising US yields and the prospects that the Fed will not cut rates in June,” said Matt Simpson, senior analyst at City Index. [US/] [USD/]

Federal Reserve policymakers said Tuesday they think it would be “reasonable” to cut U.S. interest rates three times this year, even as stronger recent economic data has cast doubt on that outcome among investors.

Data this week showed US manufacturing rebounding unexpectedly, with a rise in commodity prices raising fears that inflation could rise again.

“As commodity prices generally rise, this brings the risk of another round of inflation – so investors may be hedging against inflation,” Simpson said.

Gold, used as a hedge against inflation and as a safe haven in times of political and economic uncertainty, is up more than 10.8% so far this year and is on track for its seventh straight daily gain.

“Right now, gold feels like inflation is more of a driving variable than interest rates and some of the momentum is also being driven by speculators, hedge funds and commodity funds who are starting to buy gold when their…

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