Gold Poised for Correction Before Data Release?
Gold prices surged near a record high in Tuesday morning trading, extending the rally that has occurred over the past month. Gold has risen nearly 10% in the past month and more than 70% through 2025. This increase was driven by rising geopolitical tensions and global economic communication, which has further strengthened demand for safe-haven assets like gold.
Escalating tensions between the US and Venezuela, as well as Russia's intensifying attacks in Ukraine, have further driven investors to turn to gold as a hedge against wealth. Furthermore, expectations of further interest rate cuts by the Federal Reserve (Fed) have added to gold's appeal. Interest rate cuts can reduce the opportunity cost of holding non-interest-bearing gold, further supporting the precious metal.
The market is now pricing in a further Fed rate cut in 2026, fueled by signs of declining inflation and slowing job growth. With lower interest rates, gold is increasingly attractive to investors seeking a safe and stable asset.
Meanwhile, traders are awaiting the release of the US third-quarter (Q3) GDP report on Tuesday. The US economy is expected to grow at an annualized rate of 3.2% in Q3, although this is a slowdown compared to 3.8% in Q2. If the GDP figures are stronger than expected, this could strengthen the US dollar (USD) and put pressure on gold prices in the near term.
In addition, Durable Goods Orders, Industrial Production, and the ADP weekly jobs report will also be released on the same day. All of this provides a clearer picture of the US economic situation and could influence further gold price movements.
Gold remains a top choice in volatile markets, particularly due to worsening geopolitical tensions and the Fed's support for looser monetary policy. Investors continue to focus on US economic developments that could influence the Fed's decision to cut interest rates further.
Overall, gold prices are expected to continue strengthening, with projections of further gains towards $4,500 or more by 2026. Geopolitical uncertainty and dovish global monetary policy are the main factors driving gold to all-time highs. (asd)
Source: Newsmaker.id
