Gold prices held steady on Wednesday near a record peak hit in the previous session, as a favourable mix of emerging inflationary risks and ongoing geopolitical tensions underpinned the safe-haven metal.

Spot gold was little changed at $2,351.94 per ounce, as of 0339 GMT, after hitting a record high of $2,365.09 on Tuesday. US gold futures gained 0.3% to $2,369.90.

“Gold is diverging from its traditional key drivers… Due to geopolitical tension, central banks in emerging markets are stockpiling gold to diversify the risk, some volatility in Chinese currency and the emergence of inflation risk are also driving prices right now,” ANZ commodity strategist Soni Kumari said.

Strong central bank buying, safe-haven inflows amid elevated geopolitical risks, and demand from momentum-following funds have fuelled bullion’s 14% gain so far this year.

The US consumer price index (CPI) report for March due at 1230 GMT is expected to show that the year-on-year CPI rose to 3.4%, while the core CPI is seen slowing to 3.7%, according to a Reuters poll.

Markets also await the minutes of the Federal Reserve’s March meeting due at 1800 GMT.

The Fed had held interest rates steady at 5.25%-5.50% range last month, and indicated that they still expect to cut them by 75 basis points by end-2024.

Gold extends record rally amid speculative buying, geopolitical tensions

A strong US jobs report last week that blew past forecasts, stirred more questions on the feasibility of rate cuts this year.

Higher interest rates reduce the appeal of holding non-yielding gold.

Spot silver was little changed at $28.15 per ounce, after hitting its highest levels since June 2021 on Tuesday.

“We see that silver is going to outperform gold this year and we are expecting that investment demand which has been a laggard for silver prices is going to turn and you will start seeing prices gaining momentum right now,” ANZ Kumari added.

Platinum edged 0.1% lower to $978.50 and palladium fell 0.2% to $1,090.78.