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'Perfect storm' steers gold to another record high; silver jumps

Production of gold at Krastsvetmet precious metals plant in Krasnoyarsk

By Harshit Verma

(Reuters) - Gold prices rose to an all-time high on Monday as a cocktail of factors from U.S. rate cut expectations, China's stimulus measures to geopolitical tensions lifted demand, with the momentum also carrying silver to a more than 11-year peak.

Spot gold rose 0.9% to $2,435.96 per ounce as of 2:26 p.m. ET (1826 GMT) after hitting a record high of $2,449.89 earlier in the session.

U.S. gold futures settled 0.9% higher to $2,438.50.

"Inflation is sticky, we may see some whipsaws in the inflation data, but also the burdening debt in the U.S., there is a cause to be diversified away from that too. So it's this perfect storm that's kept the market elevated in gold," said Daniel Pavilonis, senior market strategist at RJO Futures.

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Data last week showed that U.S. consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend, boosting expectations for a September interest rate cut.

Lower rates reduce the opportunity cost of holding non-yielding bullion, which also benefits from uncertainty in the market.

RJO's Pavilonis expects gold to propel to near $2,500 in the short term as there's a fear of missing out from gold's rally. "There's a lot of non-traders that are calling up places(brokers) ... to buy futures or to take physical delivery."

Gold has also been supported by increased increased holdings in China's central bank.

Adding to gold's upside was elevated risk aversion as Iranian President Ebrahim Raisi, was killed in a helicopter crash, analysts at Kitco Metals wrote in a note.

Meanwhile, some analysts also pointed out gold's surge to China's announcement of "historic" steps to stabilise its crisis-hit property sector. China is a key consumer of gold and other industrial metals.

Spot silver rose 2.2% to $32.17 after hitting an over 11-year high.

Platinum dipped 2.5% to $1,053.43 after hitting its highest since May 2023. Palladium rose 2% to $1,028.66.

"Platinum is trading at premium over palladium with rising inflows of exchange traded funds," ANZ said in a note.

(Reporting by Harshit Verma in Bengaluru; Editing by Shailesh Kuber, Ravi Prakash Kumar and Alan Barona)