Gold Remains Strong, What's Keeping Prices Rising?
Gold prices held steady after rising nearly 2% on Wednesday, despite deepening US economic uncertainty due to the lack of reliable economic data during the six-week government shutdown. Gold traded around $4,200 an ounce on Thursday, consolidating four consecutive days of gains, its longest rally in a month. Meanwhile, US policymakers continue to debate the next interest rate decision.
Although the US House of Representatives has approved a stopgap funding bill to end the government shutdown, the White House warned that official employment and inflation data for October are unlikely to be released. Without official data, many investors are forced to rely on private statistics to get a picture of the US economy. This has boosted gold prices, which have risen nearly 5% this week, largely on expectations that interest rates will continue to be cut once Washington reopens.
Despite optimism about a rate cut, policymakers at the Federal Reserve are divided in their views. Some, such as Atlanta Federal Reserve President Raphael Bostic and Bank of Boston President Susan Collins, favor keeping rates steady to combat inflation. This uncertainty about monetary policy has created tension in the market, leading investors to turn to gold as a hedge.
This year, gold prices have risen nearly 60% and remain on track for their best annual performance since 1979. Central banks around the world, particularly China, have increased gold purchases as a means of diversification and a store of value, reducing reliance on US-centric financial markets. Although gold prices fell from their record high last month, many investors predict they could reach $5,000 or more next year. (asd)
Source: Newsmaker.id
