Gold Rose to a Record High, Ending an 18-Month Buying Spree

Gold prices hit a record high in May, exceeding $2,450 an ounce. So far this year, gold prices are up nearly 12%, mainly due to optimism about the Federal Reserve's easing policy this year. Safe-haven demand from the raging geopolitical conflicts and the elevated central bank purchases have also pushed gold prices higher this year.

However, gold suddenly shed 5% from last month's peak — in part, due to stronger-than-expected U.S. jobs data and the Chinese central bank's unexpected halt in gold purchases. With inflation persisting and recent jobs data exceeding expectations, many banking analysts expect that the Federal Reserve may scale back its rate cut expectations and cut rates twice in 2024 and 4X in 2025 (but, well, no-one knows for sure, of course).

As it was mentioned above, in May, China reportedly stopped buying gold for its reserves. The People's Bank of China's stocks remained unchanged at 72.8 million ounces in the previous month. It was the first time since October 2022 that the country's central bank did not increase its bullion reserves.