Why is the gold price and XAU USD at a record high?

It’s been an eventful start to the week, and end of last week, for gold. The precious metal has been on a winning streak that has surprised markets around the world with its sudden surges.

Gold shines bright

On Friday afternoon, during the New York trading session, the spot gold price shot up to a new record high of $2,326.93 per ounce, a gain of almost 2%, and pulled back before later in the session again climbing to a price of $2,324.38 at approximately 16:18 GMT.

The spot gold price then hovered around $2,328.70 per troy ounce for the majority of the weekend, before closing at $2,329.76 on Sunday April 7th.

However, early on Monday morning during the Asian trading session, the gold price suddenly shot up to over $2,350 per ounce – a gain of over 600%.

But why?

The XAU/USD price

The news is especially puzzling given that the gold price is usually negatively correlated with America’s nonfarm payrolls reports, with better-than expected NFP tending to boost the US dollar and depress gold’s instead.

However, last Friday’s latest nonfarm payrolls data showed that 303,000 jobs had been added to the US economy in March – well above the 200,000 initially expected by analysts.

Yet still the gold price rose. Why?

Gold in reserve

The answer might well be China, and a bit of news coverage. On Sunday, Bloomberg reported that the People’s Bank of China (PBOC – its central bank) bought yet more gold reserves in March – for the 17^th month in row, showing extreme bullishness on the precious metal.

According to the same article, gold has been loaded up on by both China and India in the past several months, which was a strong potential reason for the gold price rally we’ve seen thus far in 2024.

Fed dumps on Bitcoin

Another potential reason for gold’s bull run? Recent comments by the Fed’s Neel Kashkari may have put a significant dent in the recent theory that ‘Bitcoin is the new gold’, when Kashkari allegedly compared BTC to toys.