Gold Rises, Driven by US Economic Concerns
Gold prices held near their highest level in five months, recording their longest rally since February. This increase was driven by concerns about a US economic slowdown and growing investor expectations for an interest rate cut by the Federal Reserve. In early Asian trading on Wednesday (August 6), gold prices stabilized around $3,383 per ounce after rising more than 3% in the previous four sessions.
Market sentiment toward gold has become more positive after the latest data showed the US services sector nearly stagnated in July. Signs of economic weakness were also evident in last week's employment and consumer spending reports. These concerns have fueled speculation that the Fed will likely cut interest rates at its September meeting, with an estimated probability of doing so reaching 90%.
Interest rate cuts are typically a positive catalyst for gold, as they lower the opportunity cost of holding non-yielding assets like bullion. So far this year, gold prices have risen nearly 30% as investors seek safe havens amid geopolitical turmoil, trade conflicts, and declining confidence in US dollar-denominated assets.
However, despite its significant year-on-year increase, gold prices have remained within a narrow range in recent months and have yet to break through the record high of around $3,500 per ounce reached in April. At 8:19 a.m. Singapore time, gold prices were stable at $3,383.09 per ounce. Meanwhile, the Bloomberg Dollar Index remained unchanged, as were silver and palladium prices, while platinum weakened slightly. (ayu)
Source: Newsmaker.id
