Monday, October 7, 2024

Gold flirts with new highs as market eyes June hike

Gold prices flirted with record highs on Monday as investors continued to flock to the safe-haven metal in anticipation of a potential US Federal Reserve interest rate cut scheduled for June.

At 2:35 p.m. EDT, spot gold surged by 1.5% to reach $2,115.43 per ounce, a mere $20 shy of its previous record high of $2,135 set in December 2023. Similarly, US gold futures traded 1.4% higher at $2,124.70 per ounce.

Ryan McKay, senior commodity strategist at TD Securities, expressed optimism about gold’s potential for further gains, particularly noting that some discretionary macro traders are underinvested in the metal relative to historical norms ahead of a Federal Reserve cutting cycle.

Phillip Streible, chief market strategist at Blue Line Futures in Chicago, echoed this sentiment, suggesting that gold could easily surpass its previous record highs.

The surge in gold prices coincides with growing consensus among investors that the Federal Reserve will implement its first interest rate cut since early 2020 in June. Market data from swaps markets indicate that nearly three in five investors anticipate a rate trim, spurred by a series of weaker-than-expected US economic reports.

In addition to economic factors, ongoing geopolitical tensions, including the upcoming US presidential election and conflicts in Ukraine and Gaza, are bolstering gold’s appeal as a long-term investment option.

Ole Hansen, Saxo Bank’s head of commodity strategy, attributed the heightened geopolitical tensions worldwide to a decrease in short-selling appetite, thereby strengthening gold’s position as a preferred asset for investors seeking to capitalize on market dips.

Investor interest in gold has translated into robust buying activity in gold exchange-traded funds, with Bloomberg data indicating that holdings of SPDR Gold Shares experienced their first daily inflow in nine trading sessions last Friday.

Earlier in the day, London’s gold price benchmark reached an all-time high of $2,098.05 per ounce during an afternoon auction, surpassing the previous record set on December 28.

Alice
Alice
Alice is a seasoned jewelry designer renowned for her exquisite creations that seamlessly blend artistry with elegance. With a passion for craftsmanship and an unwavering commitment to quality, Alice has established herself as a distinguished figure in the world of fine jewelry. Drawing inspiration from diverse cultures and artistic movements, Alice brings a unique perspective to her designs, creating pieces that transcend mere accessories to become timeless works of art. Her meticulous attention to detail and insistence on using only the finest materials ensure that each creation reflects not only her artistic vision but also a commitment to unparalleled craftsmanship. Having honed her skills through years of dedicated practice and a keen understanding of evolving trends, Alice is adept at translating her clients' desires into bespoke, one-of-a-kind pieces. Her portfolio encompasses a range of styles, from classic and timeless to avant-garde and contemporary, showcasing her versatility and ability to cater to a diverse clientele.

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