Gold Has Taken Off, Can It Still Rise?
Gold prices are stabilizing after rising for three consecutive days, supported by hopes of further interest rate cuts in the US after the Fed cut rates again this week. Gold is trading around $4,270 per ounce, slightly corrected after a 1.2% surge on Thursday, while silver is trading near its all-time high.
The Fed has signaled that the door to a rate cut next year is still open, although its official projections only show one cut. The market is more aggressive: swap traders are predicting two rate cuts by 2026. A low interest rate environment like this is usually a boost for precious metals like gold and silver, which do not pay interest, making them attractive as hedges.
Additional support comes from the Fed's move to begin purchasing $40 billion in Treasury bills per month to rebuild reserves in the financial system. Gold has already risen more than 60% this year, while silver has more than doubled, with both potentially posting their best annual performance since 1979. This blistering rally is being fueled by massive central bank purchases and waning investor appetite for government bonds and currencies.
According to analyst Hebe Chen of Vantage Markets, gold's momentum has the potential to continue into 2026, supported by central bank demand, an influx of funds into gold ETFs, looser monetary policy, and still-high geopolitical tensions. However, she also warned that the market could remain volatile because the Fed is deliberately leaving ample room for policy surprises. At the same time, gold ETF holdings have continued to rise almost every month, while silver, driven by surging demand and tight market conditions, reached a record high of around $64.31 per ounce before correcting slightly alongside gold in the latest session. (asd)
Source: Newsmaker.id
