By Yusuf Khan


Gold futures are hovering at their highest level since prices soared following Russia's invasion of Ukraine, amid a sliding dollar and optimism over a pause in interest-rate hikes from the Federal Reserve.

Gold prices on Wednesday are sitting at $2,039.30 a troy ounce, having hit $2044.90 an ounce earlier in the session. The last time gold prices were this high was March 8, 2022, when prices settled at $2,043.30 an ounce.

According to analysts, the most recent rally has stemmed from a sliding dollar and economic data in the U.S. pointing to a pause in interest-rate hikes from the Fed.

Data yesterday, showed that U.S. job openings fell to their lowest level since May 2021, which is feeding the narrative that the Fed is primed to cut interest rates later this year as the U.S. economy slows, according to Commonwealth Bank of Australia's Vivek Dhar.

"We think gold futures are likely to continue responding positively to softer than expected U.S. economic and labor data until at least the next FOMC meeting on May 2-3," Mr. Dhar added in a note.

This week's rally comes on top of a particularly strong period for gold, led by jitters around the regional banking sector with the collapse of Silicon Valley Bank and Signature Bank in the U.S., as well as Credit Suisse's collapse across the Atlantic.

At the time, gold exchange-traded funds saw huge inflows worth more than $1 billion, having previously seen outflows. Data from FactSet shows that SDPR Gold Shares, the largest gold ETF by assets under management, saw inflows of $1.139 billion over the past month, with $146 million over the past week.

"If the $2,050 an ounce mark is sustainably exceeded, the price could quickly move toward the all-time high of $2,070 an ounce," said Alexander Zumpfe, precious-metals trader at Heraeus.

However, Mr. Zumpfe said that positive economic data exceeding expectations could indicate sustained inflationary pressure, and as a result could mean the Fed keeps hiking rates. He said this would put pressure on gold and could trigger a correction.


Write to Yusuf Khan at yusuf.khan@wsj.com


(END) Dow Jones Newswires

04-05-23 0603ET