BENGALURU: Gold prices made a positive start to 2024, boosted on Tuesday by expectations the US Federal Reserve will cut interest rates this year and concerns over attacks on shipping in the Red Sea. Spot gold was up 0.3% at $2,069.39 per ounce as of 9:58 am ET (1458 GMT).

US gold futures also rose 0.3%, to $2,078.60 per ounce. “I think there is a possibility of escalation in the Red Sea and that probably could push gold prices even higher,” said Daniel Pavilonis, senior market strategist at RJO Futures.

Gold prices surged 13% in 2023 in their first annual rise since 2020 and are forecast to reach record highs in 2024, with lower interest rates reducing the opportunity cost of holding non-yielding bullion. “As we saw how much of a lift the price of gold obtained from expectations of rate cuts in 2023, we could well see significant gains in 2024 when central banks actually start loosening their polices and yields move further lower,” said Fawad Razaqzada, market analyst at City Index.

“Inflationary pressures are likely to ease further across the world, leading to the start of the great rate-cutting cycle,” he said, adding that the actual timing and extent of the rate cuts will depend on incoming data.

This week, market attention is on the minutes from the last Fed meeting due on Thursday.

Data on US job openings and December non-farm payrolls, both due on Friday, will also be closely followed. Elsewhere, spot silver rose 0.8% to $23.9526 per ounce while palladium fell 0.3% to $1,095.55. Platinum edged down 0.1% to $986.44 per ounce.

“The outlook for palladium demand partly hinges on the pace of the energy transition, particularly growth in EV demand, as higher battery electric vehicle growth is negative for palladium demand,” HSBC said in a note.