SINGAPORE (Reuters) – Gold prices extended a record run on Wednesday as concerns of rising inflation boosted demand for gold as a hedge, with bullion traders shrugging off doubts over an imminent US interest rate cut and rising Treasury yields.
Spot gold was up 0.3 per cent at $2,286.24 per ounce, as of 0406 GMT, and hit a record high of $2,288.09 earlier in the session. Bullion has hit record highs consecutively since Thursday.
US gold futures gained 1.1pc to $2,306.60.
"Gold continues to receive safe-haven flows as Ukraine continues to attack Russia's oil infrastructure, to the point it is ignoring rising US yields and the prospects of the Fed not cutting rates in June," City Index senior analyst Matt Simpson said.
Federal Reserve policymakers on Tuesday said they think it would be "reasonable" to cut US rates three times this year, even as stronger recent economic data has sown investor doubts about that outcome.
Data this week showed US manufacturing unexpectedly rebounded, with the rise in raw materials prices triggering fears that inflation could resurge.
"With commodity prices rising in general, it brings the risks of another round of inflation - so perhaps investors are hedging for inflation," Simpson said.
Gold, which is used a hedge against inflation and a safe haven during times of political and economic uncertainty, has gained more than 10.8pc so far this year and is set for a seventh consecutive daily rise.
"Right now, gold is sensing that inflation is more of a driving variable than the interest rates and part of the momentum is also driven by speculators, hedge funds and commodity funds that start buying gold whenever their quantitative systems give them signals," Marex analyst Edward Meir said.
Elsewhere, spot silver rose 1.2pc to $26.41 per ounce, platinum gained 0.8pc to $925.72 and palladium edged up 0.6pc to $1.009.45.