Gold Rises Sharply, Hopes of Interest Rate Cuts Regain Strength?!
Gold prices surged for the second consecutive day, driven by growing expectations of an interest rate cut by the Federal Reserve next month. Weakening US economic data, including a sharp decline in consumer confidence and signs of a weakening labor market, prompted investors to seek safe havens like gold. The precious metal rose nearly 2% to reach $4,077 per ounce, after trading flat last week?!
Gold's rise came despite positive news from Washington regarding the possible end to the US government shutdown that has lasted more than 40 days. Several moderate Democratic senators reportedly supported a deal to reopen the government and fund several agencies. However, analysts believe that while this news could dampen gold's gains in the short term, the market's primary focus is now on the possibility of an interest rate cut.
According to Emkay Global analyst Riya Singh, signs of a weakening US economy strengthen the chances of the Fed cutting rates next month. "Optimism about the end of the shutdown could restrain gold's rise, but the underlying trend remains driven by expectations of monetary policy easing," he said. Meanwhile, data showed that China's central bank increased its gold reserves for the 12th consecutive month, supporting global demand for this precious metal.
In Asian trading this afternoon, the spot gold price rose 1.8% to $4,077.55 per ounce, while the US dollar index remained stable. Silver also strengthened 2.4%, followed by gains in platinum and palladium. Analysts believe that if US economic data delayed by the shutdown shows further weakness, the chances of the Fed cutting interest rates will increase, potentially fueling the gold rally. (asd)
Source: Newsmaker.id
