Gold Rebounds, Demand for Safe Assets Rises Again
Gold prices rebounded after their biggest drop in more than a week, driven by widespread risk-off sentiment in financial markets, boosting demand for safe assets. Spot gold rose to near $3,950 per ounce, after falling nearly 2% in the previous session, as the US dollar continued to strengthen. Global stock markets resumed their decline on Wednesday after experiencing a sharp decline, driven by concerns about high valuations.
Despite the correction, gold prices are still up about 50% this year, having reached a record high last month before declining slightly. The price decline was triggered by various signals that the rapid rise may have been overdone, coupled with a withdrawal of funds from gold-backed exchange-traded funds (ETFs). Traders are now trying to assess whether the decline in gold prices has bottomed out.
According to Bart Melek, a strategist at TD Securities, it would not be surprising to see gold prices trading in the range of $3,800 to $4,050 per ounce in the near term. Factors driving gold prices this year, such as official sector purchases and strong demand from private investors, continue to support the potential for a rebound after a consolidation phase.
At 9:41 a.m. Singapore time, gold prices rose 0.4% to $3,948.85 per ounce. The Bloomberg Spot Dollar Index remained stable after closing at its highest level since mid-May. Meanwhile, silver prices were stagnant, while palladium and platinum declined. Market focus is now also on comments from Federal Reserve officials regarding future interest rate policy. (Asd)
Source: Newsmaker.id
