Gold Heading for a New Record!?
Global gold prices continue to strengthen, approaching $3,650 per ounce and heading for a fourth weekly gain, driven by large inflows into bullion-backed ETFs. This rally comes amid expectations that the Federal Reserve is ready to cut US interest rates after consumer inflation data matched expectations and the labor market weakened. Silver also strengthened to $42 per ounce, its highest level since 2011, as investor interest in the precious metal increased.
The weakening US dollar and falling 10-year Treasury yields provided additional support for gold prices. Lower borrowing costs typically make gold more attractive as a hedge. Since the start of the year, gold has risen about 39%, making it one of the best-performing commodities, even outperforming major stock indices like the S&P 500. This rise is also supported by central bank buying and rising geopolitical uncertainty.
Bloomberg data shows that bullion ETFs recorded inflows of nearly 25 tons this week. This surge in demand is strong evidence that global investors continue to increase exposure to safe-haven assets. In Asia, Thai households are also expected to increase gold purchases for the fifth year running, driven by the weakening baht, which has made gold more affordable domestically.
While the outlook for gold remains positive, some analysts warn that much of the increase may have already been priced in by the market ahead of the Fed's interest rate cut. BMI, part of Fitch Solutions, believes the September rate cut will provide only a limited boost. However, if geopolitical tensions in the Middle East and Europe continue to escalate, gold could potentially reach a new record in the near future. (ayu)
Source: Newsmaker.id
