Gold Holds Gains, Fed Signals Make Traders Uneasy About Further Rally?
Gold prices held firm after four consecutive days of gains, amid conflicting comments from Federal Reserve officials that have caused the market to temper expectations of aggressive easing next year. Gold is trading around $4,310 per ounce, after rising more than 2% over the past week. The Fed recently cut interest rates for the third time this year, but three officials voted against the decision.
Two of the dissenters, Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeff Schmid, explained their reasoning on Friday. Goolsbee argued that it would be wise for the Fed to wait for additional economic data, especially since the government shutdown has delayed several important releases. Schmid emphasized that inflation remains too high. In theory, a low interest rate environment typically benefits gold and other non-yielding precious metals.
In terms of performance, gold has surged more than 60% this year, while silver has more than doubled, putting both on track for their best annual performance since 1979. This blistering rally is supported by massive central bank purchases and investors shifting away from government bonds and currencies. World Gold Council data shows that holdings in gold-backed ETFs have risen almost every month this year, except May.
Goldman Sachs analysts still see room for further upside. In a note, they predicted gold prices could reach $4,900 per ounce by the end of 2026, citing a strong and long-term trend in central bank buying. They estimate central bank gold purchases will average around 70 tons per month in 2026, making them a key pillar behind the gold rally.
Meanwhile, silver also remains in the spotlight. The white metal has been supported in recent weeks by speculation about tight supply following a historic squeeze in October. Silver briefly touched a record high of around $64.66 per ounce on Friday, before retreating 2.5%. At the start of the week, gold rose about 0.3% to $4,314.20, while silver gained 0.2% to $62.11. Platinum and palladium also gained, while the Bloomberg Dollar Index was flat, providing little support for the precious metal. (asd)
Source: Newsmaker.id
