Gold Nears Record High, Supported by Fed and Global Tensions
Gold prices (XAU/USD) remained trading near their record high below $3,700 per ounce earlier this week. Despite strengthening on Friday, gold prices are currently moving within a narrow range. One factor holding back gains is the strengthening US dollar, which recovered after weakening to its lowest level since July 2022 following the Federal Reserve's dovish decision. Furthermore, positive sentiment in global stock markets has also reduced interest in safe-haven assets like gold.
However, overall, fundamental conditions still support high gold prices. The Fed recently cut interest rates and signaled that two more cuts could occur before the end of the year. Lower interest rates make gold—which does not yield—more attractive than interest-bearing financial instruments, such as bonds or deposits.
In addition to monetary policy factors, geopolitical tensions and global trade uncertainty continue to be key drivers of investor interest in gold. Heating international conflicts and global economic uncertainty make gold a prime choice for hedging. These factors reinforce the view that the next direction of gold prices will likely remain upward.
With the combination of the Fed's looser policy stance and rising global risks, the opportunity for gold to reach a new record remains wide open. Although there is short-term pressure from the dollar and a strong stock market, the medium to long-term outlook remains very positive for this precious metal. (ads)
Source: Newsmaker.id
